ITEM 1A. RISK FACTORS
The following risks could materially and adversely affect our business, financial condition, results of operations, and cash flows and, as a result, the trading price of our common stock could decline. These risk factors do not identify all risks that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. Investors should also refer to the other information set forth in this Annual Report on Form 10-K, including Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements including the related Notes. Investors should carefully consider all risks, including those disclosed here, before making an investment decision.
Cybersecurity, Technology and Data Security Risks
Unauthorized access to confidential data including client data, other cyber-attacks, and the failure of our cyber-security systems and procedures
Many of our products, as well as our internal systems and processes, involve the collection, retrieval, processing, storage and transmission of our own, as well as supplier and client, proprietary information and sensitive or confidential data through a variety of media channels. We rely on, and continuously invest in, internal processes, controls, policies, procedures and employee training programs designed to protect confidential data received in the ordinary course of business, including information from client portfolios and strategies. However, these measures do not guarantee security, and improper access to or release of confidential information may still occur—whether due to employee error or malfeasance, system error, inadvertent release, failure to properly purge or protect data, or through cyber-attacks.
Our size, scale and role in the financial markets increases our risk for cyber-attacks and our exposure to other cyber-security risks. We use third-party service providers for certain critical functions. We and our third-party service providers are subject to the risks of system failures, security breaches and cyber-attacks, such as those sponsored by nation-states, terrorist organizations, or global corporations seeking to illicitly obtain technology or other intellectual property, including through the use of generative AI, agentic AI, phishing scams, hacking, viruses, denial of service attacks, tampering, intrusions, physical break-ins, ransomware and malware, employee errors or malfeasance.
Cyber-security risks also may be derived from fraud or malice on the part of our employees or third-party service providers, or may result from human error, software bugs, server malfunctions, software or hardware failures or other technological failures. Our and our vendors' use of mobile and cloud technologies may increase our risk for such threats. Our protective systems and procedures and those of third parties to which we are connected, such as cloud computing providers, may not be effective against these threats. In addition, failure by our clients or third-party service providers to notify us of system failures or security breaches in a timely manner could lead to unauthorized access to our systems and data, resulting in adverse effects on our business, operating results or financial condition.
We also make acquisitions periodically. While significant effort is placed on addressing information technology security issues with respect to the companies we acquire, we may inherit such risks when these acquisitions are integrated into our infrastructure. Although we conduct due diligence during acquisition processes, acquired businesses may not have invested as heavily in security measures and technology, and this may introduce additional security risk.
While we have dedicated resources responsible for maintaining appropriate levels of cybersecurity, and implemented systems and processes intended to help identify cyberattacks and protect and remediate our network infrastructure, we may not be able to anticipate, prevent or detect all such attacks. As these threats continually evolve, we are required to devote additional resources and investment to modify or enhance our systems and processes, including patch and vulnerability management, which we may not be able to do in a timely or complete manner, or without adversely impacting our business, financial condition or results of operations.
We make a range of commitments to our clients regarding our security practices, processes and security posture. If we do not adequately implement and enforce these security practices to the satisfaction of our clients, we could be in violation of our commitments to our clients. Cyberattacks, security breaches or third-party reports of perceived security vulnerability to our systems, even if no breach has occurred, also could damage our brand and reputation, result in litigation, regulatory actions, loss of client confidence and increased legal liability. While we maintain insurance coverage that is intended to address certain aspects of cybersecurity and data protection risks, such coverage may not include, or may not be sufficient to cover, all or the majority of the costs, losses or types of claims.
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A prolonged or recurring outage and other business continuity disruptions could result in a reduced or total loss of service; the loss of clients and adverse impact on our reputation
Our clients rely on us for the delivery of time-sensitive, accurate, complete and up-to-date data and applications. Our business is dependent on our ability to process substantial volumes of data and transactions rapidly and efficiently on our computer-based networks, database storage facilities, and other network infrastructure, which are located across multiple facilities globally. If we experience significant growth of our client base, increases in the number of products or services we offer, or increases in the speed at which we are required to provide products and services, it may strain our systems. Additionally, our systems and networks may become strained due to aging or end-of-life technology that we have not yet updated or replaced.
Our computer operations, as well as our other business centers, and those of our suppliers and clients, may be vulnerable to interruption by fire, natural disaster, public health crisis (e.g., pandemics), extreme weather or climate conditions, power loss, telecommunication failures, terrorist attacks, acts of war or civil unrest, internet failures, computer viruses, security breaches, employee or systems errors, and other events beyond our reasonable control. In addition, in remote work environments, the daily activities and productivity of our workforce is now more closely tied to key vendors consistently delivering their services without material disruption. Our ability to deliver information using the internet and to operate in a remote working environment may be impaired because of infrastructure failures, service outages at third-party internet providers, malicious attacks, or other factors.
We also currently use multiple providers of cloud services; however, one supplier provides the majority of our cloud computing support. While we believe this provider to be reliable, we have limited control over its performance, and a disruption or loss of service from this provider could impair our system's operation and our ability to operate for a period of time.
We maintain back-up facilities and certain other redundancies for each of our data centers to minimize the risk that any event will disrupt those operations, but if we were to suffer such an event it may mean we are unable to provide our service for a prolonged period of time, and our IT disaster recovery processes may not be adequate. From time to time we have experienced outages across certain of our products and service providers, and we may still experience outages or other disruptions in the future, and such outages or disruptions may have a material adverse effect on the Company.
We are currently implementing a multi-year project to enhance our information technology disaster recovery processes with modernized tooling and automation to maximize resiliency and minimize recovery time in the event of a service disruption. However, a loss of our services involving our significant facilities may materially disrupt our business and may induce our clients to seek alternative data suppliers. Any such losses or damages we incur could have a material adverse effect on our business. Although we seek to minimize these risks through security measures, controls, back-up data centers, emergency planning and disaster recovery processes, there can be no assurance that such efforts will be successful or effective. Additionally, we may face significant increases in our use of power and data storage and may experience a shortage of capacity and increased costs associated with such usage.
Transition to new technologies, applications and processes could expose us to unanticipated disruptions or impacts
The technology landscape is constantly evolving. To remain competitive, we must invest, adapt and migrate to new technologies, applications and processes, including the evolving use of AI technology and agentic AI (see "Our use of AI technologies may not be successful and may present business, compliance, and reputational risks" below for further discussion). Use of more advanced technologies and infrastructure is critical to the development of our products and services, the scaling of our business for future growth, and the accurate maintenance of our data and operations. The implementation of new technologies and infrastructure, such as migration to new cloud-based systems and increased utilization of AI internally and in our products and services, is complex and can involve substantial expenditures, as well as, risks inherent in the conversion to any new system, including potential loss of information and disruption to operations.
Use of open source software could introduce security vulnerabilities, impose unanticipated restrictions on our ability to commercialize our products and services, and subject us to increased costs
We use open source code in our software development and incorporate it into our products and internal systems. The use of open source code may entail greater risks than the use of third-party commercial software. Open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality or security of the code. Some open source licenses provide that if we combine our proprietary applications with the open source software in a certain manner, we could be required to release the source code of our proprietary applications to the public. This would allow our competitors to create similar products with less development effort and time and ultimately put us at a competitive disadvantage. We have implemented procedures to control the use of open source code so as to mitigate this risk; however, the terms of many open source licenses are also ambiguous and have not been interpreted by U.S. or other courts. Therefore, there
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is a risk that our internal procedures controlling the use of open source code could fail, or that the licenses could be construed in a manner that imposes unanticipated conditions or restrictions on us. If any of this were to occur, we could be required to seek alternative third-party licenses at increased costs or reduced scope, to re-engineer products or systems, or potentially to discontinue the licensing of certain products. Any remedial actions could divert resources away from our development efforts, be time intensive and have a significant cost.
Our use of AI technologies may not be successful and may present business, compliance, and reputational risks
We use, and are expanding our use of, machine learning and AI technologies in our products and processes. If we fail to keep pace with rapidly evolving AI technological developments, or fail to launch products that are competitive, our competitive position and business results may be negatively impacted. If our competitors or other third parties incorporate AI technologies, such as emerging generative and agentic AI, into their products and processes more quickly or more successfully than us, this could impair our ability to compete effectively. Our use of AI technologies, including generative and agentic AI, requires resources to develop, test and maintain such products, which is costly. Despite our investments in, and commitment of resources to, the development of AI products and technologies, we may not be successful in generating revenues from these efforts. In addition, third parties may be able to use AI to create technology that could reduce demand for our products and services.
The introduction of AI technologies, particularly generative and agentic AI, into new or existing offerings may result in new or expanded risks and liabilities, due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality, data privacy or security risks, as well as other factors that could adversely affect our business, reputation, and financial results. For example, AI technologies can lead to unintended consequences and errors, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and expose us to liability. If the content, analyses, or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate, unreliable, misleading, biased, discriminatory or otherwise flawed, any of which may not be easily detectable, our business and reputation may be adversely affected. Use of AI technologies, and the evolving legal, regulatory and compliance framework for AI, could impact our ability to protect our data and intellectual property, as well as vendor and client information, and could expose us to intellectual property or other claims by third parties. Use of AI technologies may also increase risks related to cyberattacks or other security incidents or result in a failure to protect confidential information. Because AI technology is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to our use of AI. These risks include the possibility of enhanced governmental or regulatory scrutiny, litigation or other legal liability, compliance issues, ethical concerns, negative client perceptions, confidentiality or security risks, as well as other factors. Any of these issues could materially adversely affect our business, financial condition or results of operations.
AI technologies used in our products and processes may use or incorporate data from third-party sources, including information they input into the AI tools, which may expose us to risks associated with data rights and protection.
Strategy and Market Demand Risks
Competition in our industry may cause price reductions or loss of market share, or limit our growth or profitability
We continue to experience intense competition across all of our products and services, with competitors ranging in size from smaller, highly specialized, single-product businesses to multi-billion-dollar companies. New and existing competitors are constantly developing innovative products or business models, including alternative data, analytics, technology-enabled platforms, and fintech solutions. Many of these competitors also have significant AI capabilities and funding. Some of these competitors may be able to introduce new technology, deliver products and services, or leverage data and analytics faster or more effectively than we can.The rapid pace of technological change, including advances in AI, cloud computing, and machine learning, along with evolving client demands, could cause our products and services to become outdated or less competitive. If we fail to keep pace with innovation, invest in developing new technology or data products, or successfully respond to disruptive competitors and emerging industry standards, our market position, revenues and operating results could be adversely affected. While we believe the breadth and depth of our suite of products and applications offer benefits to our clients that are a competitive advantage, our competitors may offer price incentives to attract new business. Future competitive pricing pressures may result in decreased sales volumes and price reductions, resulting in lower revenues and ASV. Weak economic conditions may also result in clients seeking to utilize lower-cost information that is available from alternative sources. The impact of cost-cutting pressures across the industries we serve could lower demand for our products and services. Clients within the financial services industry that strive to reduce their operating costs may seek to reduce their spending on financial market data and related services, such as ours. If our clients consolidate their spending with fewer suppliers, by selecting suppliers with lower-cost offerings or by self-sourcing their needs for financial market data, our business could be negatively affected.
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The continued shift from active to passive investing could negatively impact user count growth and revenues
The predominant investment strategy today is no longer active investing, which attempts to outperform the market. The main advantage of active management is the expectation that the investment managers will be able to outperform market indices. They make informed investment decisions based on their experiences, insights, knowledge and ability to identify opportunities that can translate into superior performance. The main advantage of passive investing is that it closely matches the performance of market indices. Passive investing requires little decision-making by investment managers and low operating costs which result in lower fees for the investor. A continued shift to passive investing, resulting in an increased outflow to passively managed index funds, could reduce demand for the services of active investment managers and consequently, the demand of our clients for our products and services.
A decline in equity and/or fixed income returns may impact the buying power of investment management clients
A significant portion of our ASV is derived from our investment management clients, and the profitability and management fees of many of these clients are tied to assets under management. An equity market decline not only depresses the value of assets under management but also could cause a significant increase in redemption requests from our clients’ customers, further reducing their assets under management. Reduced client profits and management fees may cause our clients to cut costs. Moreover, extended declines in the equity and fixed income markets may reduce new fund or client creation. Each of these developments may result in lower demand from investment managers for our products and services, which could negatively affect our business.
Uncertainty or downturns in the global economy and consolidation in the financial services industry may cause us to lose clients and users
Many of our clients are asset and wealth managers, investment and commercial bankers, hedge funds, private equity and venture capital professionals, and other financial services entities. Uncertainty or downturns in the global economy or a lack of confidence in the global financial system could negatively impact our clients, which could cause a corresponding negative impact on our business results. Mergers, consolidation or contraction of our clients in the financial services industry also could directly impact the number of clients, prospective clients and users of our products and services. If our clients merge with or are acquired by other entities that are not our clients, or that use fewer of our products and services, they may discontinue or reduce their use of our products and services. Thus, economic uncertainty, economic downturns, lack of confidence in the global financial system, and consolidation in this sector could adversely affect our business, financial results and future growth.
Volatility or downturns in the financial markets may delay the spending pattern of clients and reduce future ASV growth
The decision on the part of large institutional clients to purchase our products and services often requires management-level sponsorship and typically depends upon the size of the client, with larger clients having more complex and time-consuming purchasing processes. The process is also influenced by market volatility and market downturns. These characteristics often lead us to engage in relatively lengthy sales efforts. Purchases (and incremental ASV) may therefore be delayed as uncertainties or downturns in the financial markets may cause clients to remain cautious about capital and data content expenditures, particularly in uncertain economic environments. Market volatility or market downturns may curtail our client's spending and lead them to delay or defer purchasing decisions or product service implementations, or cause them to cancel or reduce their spending with us, which could negatively impact our revenues and future growth.
Failure to develop and market new products and enhancements that maintain our technological and competitive position and failure to anticipate and respond to changes in the marketplace for our products and client demands
The market for our products is characterized by rapid technological change, including developing technologies such as AI, including agentic AI, methods and speed of delivery, changes in client demands, development of new investment instruments and evolving industry standards. The direction of these trends can render our existing products less competitive, obsolete or unmarketable. As a result, our future success will continue to depend upon our ability to identify and develop new products and enhancements that address the future needs of our target markets and to respond to their changing standards and practices. We may not be successful in developing, introducing, marketing, licensing and implementing new products and enhancements on a timely and cost-effective basis or without impacting the stability and efficiency of existing products and client systems. Further, any new products and enhancements may not adequately meet the requirements of the marketplace or achieve market acceptance. We must make long-term investments and commit significant resources, for example, to developing and utilizing AI technology, before knowing whether these investments will eventually result in products and services that satisfy our clients' needs and generate revenues required to provide the desired results. Our failure or inability to anticipate and respond to changes in the marketplace, including competitor and supplier developments, may also adversely affect our business, operations and growth.
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Errors or defects can exist at any point in a product's life cycle, but are more frequently found after the introduction of new products or enhancements to existing products. Despite internal testing and testing by clients, our products may contain errors. We may also experience delays while developing and introducing new products for various reasons, such as difficulties in licensing data inputs. Defects, errors, or delays in our products that are significant, or are perceived to be significant, could result in rejection or delay in market acceptance, damage to our reputation, loss of revenues, lower rate of license renewals or upgrades, diversion of development resources, product liability claims or regulatory actions, or increases in service and support costs.
Clients are seeking additional contractual protections that may create additional liabilities for us
Clients are increasingly looking to pass on contractual obligations to us, which may include service level, information and cyber-security requirements and audit rights. Many of our clients in the financial services sector are also subject to regulations and requirements to adopt risk management processes commensurate with the level of risk and complexity of their third-party relationships (including as required under the European Union ("EU") Digital Operational Resilience Acts ("DORA")), and provide rigorous oversight of relationships that involve certain "critical activities," some of which may be deemed to be provided by us. Any failure on our part to comply with the specific provisions in client contracts, including having appropriate information security capabilities, could result in the imposition of various penalties, which may include termination of contracts, service credits, suspension of payments, contractual penalties, adverse monetary judgments, and, in the case of government contracts, suspension from future government contracting. Even if the outcome of any claims brought against us were ultimately favorable, such a claim would require the time and attention of our management, personnel, as well as financial and other resources and potentially pose a significant disruption to our normal business operations and reputational damage.
Failure to identify, integrate, or realize anticipated benefits of acquisitions and strains on resources as a result of growth
In fiscal 2025, we completed several corporate transactions, including the acquisition of Irwin, LiquidityBook and LogoIntern. There can be no assurance that we will be able to identify suitable candidates for successful acquisition at acceptable prices. Additionally, there may be integration risks or other risks resulting from acquired businesses. Our ability to achieve the expected returns and synergies from past and future acquisitions and alliances depends in part upon our ability to integrate the offerings, technology, sales, administrative functions and key personnel of these businesses effectively into our core business. We cannot guarantee that our acquired businesses will perform at the levels anticipated. In addition, past and future acquisitions may subject us to unanticipated risks or liabilities or disrupt operations.
Growth, such as the addition of new clients and acquisitions, puts demands on our resources, including our internal systems and infrastructure. These may require improvements or replacement to meet the additional demands of a larger organization. Further, the addition of new clients and the implementation of such improvements would require additional management time and resources. These needs may result in increased costs that could negatively impact results of operations. Failure to implement needed improvements, such as improved scalability, could result in a deterioration in the performance of our internal systems and negatively impact the performance of our business.
Failure to maintain reputation
We enjoy a positive reputation in the marketplace. Our ability to attract and retain clients and employees is affected by external perceptions of our brand and reputation. Reputational damage from negative perceptions or publicity, including, without limitation, market perception of our sustainability and corporate responsibility policies and practices, could affect our ability to attract and retain clients and employees and our ability to maintain our pricing for our products and services. Although we monitor developments for areas of potential risk to our reputation and brand, negative perceptions or publicity could have a material adverse effect on our business and financial results.
Increased scrutiny with respect to sustainability matters
New laws, regulations, policies, and international agreements relating to environmental, social and governance (“ESG”) matters are being developed and formalized in Europe and elsewhereglobally, which requires us to comply with specific, target-driven frameworks, disclosure and other requirements in multiple jurisdictions. Increased public, political or media scrutiny concerning ESG or climate matters may negatively affect our reputation. We may face criticism in respect of our climate and ESG products. We may also face increased scrutiny from political leaders, organizations or groups criticizing ESG or climate-focused products, or our compliance with global ESG regulations. Such scrutiny may impact demand for our products or limit our ability to attract and retain clients, resulting in adverse effects on our business, operating results or financial condition.
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Operational Risks
Operations outside the U.S. involve additional requirements and burdens that we may not be able to control or manage successfully
In fiscal 2025, approximately 39% of our revenues related to operations located outside the U.S. In addition, approximately 80% of our employees are located in offices outside the U.S., including India and the Philippines. We expect our growth to continue outside the U.S. Our non-U.S. operations involve risks that differ from or are in addition to those faced by our U.S. operations. These risks include difficulties in developing products, services and technology tailored to the needs of non-U.S. clients, including in emerging markets; different employment laws and rules; rising labor costs in lower-wage countries; difficulties in staffing and managing personnel that are located outside the U.S.; different regulatory, legal and compliance requirements, including in the areas of privacy and data protection, anti-bribery and anti-corruption, trade sanctions and restraints and currency controls, marketing and sales and other barriers to conducting business; social and cultural differences, such as language; diverse or less stable political, operating and economic environments and market fluctuations; extreme weather conditions, civil disturbances or other catastrophic events that reduce business activity, including the risk that the current conflicts in Ukraine and Russia and in the Middle East expand in a way that impacts our business and operations; limited recognition of our brand and intellectual property protection; differing accounting principles and standards; restrictions on or adverse tax consequences from entity management efforts; and changes in U.S. or foreign tax laws. If we are not able to adapt efficiently or manage the business effectively in markets outside the U.S., our business prospects and operating results could be materially and adversely affected.
Failure to enter into, renew or comply with contracts supplying new and existing content sets or products on competitive terms
We collect and aggregate third-party content from data suppliers, news sources, exchanges, brokers and contributors into our own dedicated managed databases, which clients access to perform their analyses. These databases are important to our operations as they provide clients with key information. We have entered into third-party content agreements of varying lengths, which in some cases can be terminated on one year’s notice at predefined dates, and in other cases on shorter notice. Some of our content provider agreements are with competitors or smaller entities who may be acquired by our competitors, who may attempt to make renewals difficult or expensive. We seek to maintain favorable contractual relationships with our content suppliers, including those that are also competitors. However, we cannot control the actions and policies of our content suppliers and we may have content suppliers who provide us with notice of termination, or exclude or restrict us from use of their content, or only license such content at prohibitive cost. Additionally, despite our efforts to comply with our third-party content supplier agreements, there can be no assurances that third parties may not challenge our use of their content, especially during periods of economic uncertainty, which could result in increased licensing costs, loss of rights, and costly legal actions. Certain content sets that we rely on have a limited number of suppliers, although we make every effort to assure that, where reasonable, alternative sources are available. We are not dependent on any one third-party content supplier to meet the needs of our clients, with two data suppliers each representing more than 10% of our total content costs for fiscal 2025. Additionally, we use AI technologies from third party suppliers, which may include open-source software. If we are unable to maintain rights to use these AI technologies on commercially reasonable terms, we may be forced to acquire or develop alternate AI technologies. Our failure to be able to maintain our supplier relationships, or the failure of our suppliers to deliver accurate content or in a timely manner, or the occurrence of a dispute with a vendor over use of their content, could increase our costs and reduce the type of content and products and services available to our clients, which could harm our reputation in the marketplace and adversely affect our business.
Increased accessibility to free or relatively inexpensive information sources may reduce demand for our products and services
Each year, an increasing amount of free or relatively inexpensive information becomes available, particularly through the internet, and this trend is likely to continue, especially with the deployment of AI tools. The availability of free or relatively inexpensive information may reduce demand for our products and services. While we believe our offerings are distinguished by such factors as standardization, timeliness, normalization, accuracy, ease-of-use, completeness and other value-added factors, if users choose to obtain the information they need from public or other sources, our business, results of operations, and cash flows could be adversely affected.
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Inability to hire and retain key qualified personnel or navigate key management transitions
The development, maintenance, sale and support of our products and services are dependent upon the knowledge, experience and ability of our highly skilled, educated and trained key personnel. Accordingly, our business is dependent on successfully attracting, retaining and training talented employees and navigating key management transitions (including in our executive leadership team) in a highly competitive business environment. Competition for talent, especially engineering, technology, and sales personnel, is strong. Our ability to attract and retain talented employees is dependent on a number of factors, including prevailing market conditions and compensation packages offered by companies competing for the same talent.
Key management transitions, such as our recent change in Chief Executive Officer, involve inherent risk, and such transition periods can be disruptive and may result in a loss of personnel with deep institutional or technical knowledge. If we are unsuccessful in our recruiting efforts, or if we are unable to retain key employees or offer competitive compensation and benefit packages and career structures, or if we are unable to navigate key management transitions, our ability to develop and deliver successful products and services or achieve strategic goals may be adversely affected, which could have a material adverse effect on our business and results of operations.
If we fail to maintain proper and effective internal control and remediate any future control deficiencies, our ability or perceived ability to produce accurate and timely financial statements or reporting could be impaired, which could harm our business.
The Sarbanes-Oxley Act places certain requirements on public reporting companies with respect to internal controls for financial reporting and disclosure controls and procedures. As such, public reporting companies are required to furnish a report by management on, among other things, the effectiveness of internal control over financial reporting. This assessment will include disclosure of any material weaknesses identified by management in a company’s internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, we identified a material weakness in our internal control over financial reporting related to the design and operation of our information technology (“IT”) general controls that support our revenues, accounts receivable, and deferred revenues processes. We are still in the process of enhancing our internal controls related to the design and operation of our IT general controls that support our revenues, accounts receivable, and deferred revenues processes and expect to complete these remediation measures in fiscal 2026. However, remediation efforts have placed, and will continue to place, a significant burden on management and add increased pressure to our financial and IT resources and processes. No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls will be met, and no evaluation of controls can provide absolute assurance that all control deficiencies or material weaknesses have been or will be detected. There is no assurance that any remediation efforts will be fully effective. If we identify one or more additional material weaknesses, or, if we are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our financial reporting may be adversely affected and could result in violations of applicable securities laws, stock exchange listing requirements, negatively affect investor confidence in our financial statements, subject us to litigation or investigations and adversely impact our stock price and our ability to access capital markets.
Legal and Regulatory Risks
Legislative and regulatory changes in the environments in which we and our clients operate
As a business, we are subject to numerous laws and regulations in the U.S. and in the other countries in which we operate. These laws, rules, and regulations, and their interpretations, may conflict or change in the future, and compliance with these changes may increase our costs or cause us to make changes in or otherwise limit our business practices. In addition, the global nature and scope of our business operations make it more difficult to monitor areas that may be subject to regulatory and compliance risk. If we fail to comply with any applicable law, rule, or regulation, we could be subject to claims and fines and suffer reputational damage. Uncertainty caused by political change globally and complex relationships across countries heightens the risk of regulatory uncertainty.
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Many of our clients operate within a highly regulated environment and must comply with governmental legislation and regulations. During the last several years, global regulators have increased their focus on the regulation of the financial services industry. Increased regulation of our clients may increase their expenses, causing them to seek to limit or reduce their costs from outside services such as ours. Some recent legislative and regulatory changes that we believe could impact us and our clients include: (a) in the U.S., the Financial Data Transparency Act 2022 ("FDTA"), which requires the FDTA’s sponsoring U.S. government agencies to identify standards, including common identifiers, for reporting financial products and transactions to those agencies; (b) in the EU, the EU’s DORA imposes operational resilience and cyber security standards and obligations, including technical and organizational standards and responsibilities which require technology and/or organizational investment, upon (i) many of our financial market clients, who aim to pass such obligations onto vendors, including us, and (ii) information and communications technology providers designated by the EU as “Critical Third Party Providers.”The United Kingdom ("UK") is advancing similar legislation and other jurisdictions could follow; and (c) in Asia Pacific, we and our clients are subject to a number of regulatory risks. For example, in China, there is an evolving regulatory environment and complex data security and data transfer regulations. These factors may increase compliance risk and costs for us and our clients.
Adverse resolution of litigation or governmental investigations
We are party to lawsuits in the normal course of our business, including a purported class action relating to our acquisition, and operation of, the CGS business (Dinosaur Financial Group LLC et al. v. S&P Global, Inc. et al). Litigation and governmental investigations can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. Unfavorable resolution of lawsuits could have a material adverse effect on our business, operating results or financial condition. While we maintain insurance coverage in respect of certain risks, some of these lawsuits may not be covered by existing insurance. Even if we successfully defend against these lawsuits, the costs of defending such lawsuits may be material to our business, operating results or financial condition and may divert our management’s attention from our business operations. For additional information regarding legal matters, see Item 3. Legal Proceedings, of this Annual Report on Form 10-K.
From time to time, we receive client complaints. We believe we have strong contractual protection in the terms and conditions included in our arrangements with our clients. Nonetheless, in the interest of managing client relationships, we may from time to time engage in dialogue with clients in an effort to resolve such complaints, and if such complaints cannot be resolved through dialogue, we may face litigation regarding such complaints.
Third parties may claim we infringe upon their intellectual property rights or they may infringe upon our intellectual property rights
We may receive notice from others claiming that we have infringed upon their intellectual property rights. Responding to these claims may require us to enter into royalty and licensing agreements on unfavorable terms, incur litigation costs, enter into settlements, stop selling or redesign affected products, or pay damages and satisfy indemnification commitments with our clients or suppliers under contractual provisions of various license arrangements. Additionally, third parties may copy, infringe or otherwise profit from the unauthorized use of our intellectual property rights, requiring us to litigate to protect our rights. Certain countries may not offer adequate protection of proprietary rights. If we are required to defend ourselves or assert our rights or take such actions mentioned, our operating margins may decline as a result. We have incurred, and expect to continue to incur, expenditures to acquire the use of technology and intellectual property rights as part of our strategy to manage this risk.
Compliance with global data privacy laws which are constantly evolving
We, and certain types of information we collect, compile, use, and publish, are subject to numerous global laws and regulations governing the protection of personal and confidential information of our clients, employees and products in the jurisdictions in which we operate. These include, for example, the EU's General Data Protection Regulation, an increasing number of U.S. state laws, such as California's Consumer Privacy Act and Connecticut's Personal Data Privacy and Online Monitoring Act, China's Personal Information Protection Law, and India's Digital Personal Data Protection Act. These laws contain requirements regarding the handling of personal and sensitive data, including our use, protection and the ability of persons whose data is stored to correct or delete such data about themselves. The law in this area continues to develop and the changing nature of these laws could impact our processing and cross-border transfer of personal and sensitive information related to our content, operations, employees, clients, suppliers and others, and may expose us to claims of violations.Further, global privacy, data localization, data maintenance, data transfer and data protection legislation, regulatory, enforcement, and policy activity are rapidly and continually evolving and creating a complex regulatory compliance environment.
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Additional cost due to tax assessments resulting from ongoing and future audits by tax authorities as well as changes in tax laws
In the ordinary course of business, we are subject to changes in tax laws as well as tax examinations by various governmental tax authorities. The global and diverse nature of our business means that there could be additional examinations by governmental tax authorities and the resolution of ongoing and other probable audits which could impose a future risk to the results of our business.
For example, during August 2019 through February 2024, we received various assessment and audit notices from the Commonwealth of Massachusetts Department of Revenue with respect to sales taxes, interest and underpayment penalties relating to the tax periods from January 1, 2006 through December 31, 2023 ("Sales Tax Dispute"). We entered into an agreement with the Commonwealth on November 26, 2024 which fully resolved all matters relating to the Sales Tax Dispute, bringing our total charge with respect to that matter to approximately $66.2 million. For a further discussion see Part II, Item 8. Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K.
Changes in tax laws or the terms of tax treaties in a jurisdiction where we are subject to tax could have an impact on our taxes payable. In addition, as a global taxpayer, we face challenges due to increasing complexities in accounting for, and collecting, taxes in a variety of jurisdictions, which could impact our tax obligations and effective tax rate.
Financial Market Risks
Exposure to fluctuations in currency exchange rates and the failure of hedging arrangements
Due to the global nature of our operations, we are exposed to market risk arising from fluctuations in foreign currency exchange rates, particularly in our primary currency exposures, namely the British Pound Sterling, Euro, Indian Rupee and Philippine Peso. These fluctuations can adversely affect our financial results. To the extent our international activities increase in the future, our exposure to fluctuations in currency exchange rates may increase as well. To manage this exposure, we use derivative instruments, specifically foreign currency forward contracts, that are designed to offset the impact of currency movements on a portion of our projected operating expenses related to our primary currency exposures. Although we believe that our foreign exchange hedging policies are reasonable and prudent under the circumstances, our attempt to hedge fluctuations in foreign currency exchange rates may not be successful, which could cause an adverse impact on both our results of operations and cash flows.
Business performance may not be sufficient to meet financial guidance or publicly disclosed long-term targets
We provide public, full-year financial guidance based upon assumptions regarding our expected financial performance, including our ability to grow revenues and Organic ASV, to meet our planned expenses and maintain a certain tax rate, and to achieve our profitability targets. We can provide no assurances that we will be able to maintain the levels of growth and profitability that we have experienced in the past, or that our growth strategies will be successful. If we are unable to successfully execute on our strategies to achieve our growth objectives and retain our existing clients, or if we experience higher than expected operating costs or taxes, we risk not meeting our full-year financial guidance or may find it necessary to revise such guidance during the year, which could have an adverse impact on our stock price.
Economic, political and other forces beyond our control could adversely affect our business.
Our costs and the demand for our products and services may be impacted by domestic and international factors that are beyond our control. Negative conditions in the general economy in either the U.S. or abroad, including conditions resulting from financial and credit market fluctuations, changes in economic policy, inflation rate fluctuations and trade uncertainty, including changes in tariffs, sanctions, international treaties and other trade restrictions, or other geopolitical events, such as the ongoing military conflicts between Russia and Ukraine and in the Middle East, natural and man-made disasters and public health crises (e.g., pandemics) could result in an increase in our costs and/or a reduction in demand for our products and services, which could have an adverse effect on our results of operations and financial condition.
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In addition, the U.S. has imposed tariffs on many foreign products, including tariffs on imports from China, that in the past have resulted in and may result in future retaliatory tariffs on U.S. goods and products and restrictions on exports to the U.S. Such developments have the potential to adversely impact the U.S. economy, our industry and the demand for our products. There remains uncertainty surrounding tariffs imposed by the U.S. and China and trade relations between the two countries, and we cannot predict whether these policies will continue, or if new policies will be enacted (which may restrict our ability to operate in China, or lead to other consequences, such as the need to comply with data localization requirements).As a result, such changes could have a material adverse effect on our business, financial condition and results of operations.
Risks Relating to Our Debt
Our indebtedness may impair our financial condition and operations and restrict our activities or our ability to satisfy our obligations
Our indebtedness could have important consequences for our business, including making it more difficult to satisfy our obligations, increasing our vulnerability to general adverse economic and industry conditions, limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, and placing us at a competitive disadvantage compared to our peers.
Our ability to meet our payment and other obligations under our debt depends on our ability to generate sufficient cash flow in the future. We cannot be certain that our business will generate cash flow from operations, or that future borrowings will be available to us under our existing or any future credit facilities or otherwise, in an amount sufficient to enable us to meet our indebtedness obligations and to fund other liquidity needs. Certain of our borrowings are based upon variable interest rates, and although we leverage interest rate swap agreements to manage a portion of our floating interest rate exposure, in the event of increases in interest rates, this could result in higher interest expense.
In addition, we are subject to certain covenants, including financial covenants and certain limitations on the incurrence of additional debt, the creation of liens, our ability to enter certain transactions, and other matters. These covenants could adversely affect our ability to finance our future operations or capital needs and pursue available business opportunities. Events beyond our control, including changes in general economic and business conditions, may affect our ability to meet required financial covenants. A breach of any of these covenants or any other restrictive covenants contained in the definitive documentation governing our indebtedness would result in a default or an event of default, which could result in all of our debt becoming immediately due and payable or require us to negotiate an amendment to financial or other covenants that could cause us to incur additional fees and expenses.
If new debt is added to our current debt levels, the risks described above could intensify.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Cybersecurity Risk Management and Strategy
We maintain an information security program with a dedicated internal team that is tasked with leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes. Our information security team is responsible for identifying, assessing, managing, and responding to cybersecurity risks, threats and incidents relating to the protection of our information assets, systems and operations. The information security team also oversees the detection, prevention, mitigation and remediation of all cybersecurity incidents. Our information security team proactively monitors emerging cyber threat activity to proactively tune and upgrade our cyber capabilities to maintain a robust security posture.
Our information security program is managed by a dedicated Chief Information Security Officer ("CISO") who reports to our Chief Technology Officer, a member of our Executive Leadership Team ("ELT"). Our CISO has a graduate degree in computer engineering and has worked in cybersecurity for over two decades, including at a major financial institution. The information security team is comprised of approximately 60 employees, with dedicated teams assigned to governance, risk and compliance, identity and access management, strategy and architecture, and analytics and automation. The team operates from FactSet locations around the world, including offices in the U.S., India, the Philippines and Europe.
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FactSet's information security and governance framework is guided by International Organization for Standardization ("ISO") 27001 and System and Organization Control ("SOC") 2 Trust Service Criteria and the National Institute of Standards and Technology ("NIST") Cybersecurity Framework.
Cybersecurity risk management is integrated into our broader Enterprise Risk Management ("ERM") framework. FactSet's ERM program is designed to identify, prioritize and assess the most significant risks that could impact our ability to achieve our strategic business objectives. Our information security leadership team, in concert with our ERM team, reviews our cybersecurity risks each quarter through our enterprise risk assessment process.
FactSet's information security program is grounded in a risk-based approach. Our information security team undertakes various activities to assess, identify and manage risks from cybersecurity threats, including managing security controls, conducting penetration testing, leading training and tabletop exercises (including an annual tabletop exercise with the ELT), and conducting internal and external vulnerability assessments. All FactSet's employees receive mandatory annual cybersecurity training; software engineers receive training on secure software development best practices; and other ad hoc training is provided to employees on the latest cyber threat landscape. In addition, we also perform quarterly "phishing simulations" to test the effectiveness of our security training program.
FactSet's information security team performs annual penetration testing with leading service providers, to mimic motivated threat actors, to assess the internal and external security posture of the Company. Findings from the penetration test and our internal and external vulnerability assessments are classified using a combination of scores and internal business metrics.
We have processes to identify and mitigate cybersecurity risks stemming from our relationships with third parties, including protocols to assess vendors' cybersecurity programs before we engage them and to monitor vendors, once engaged, for ongoing compliance with our cybersecurity standards.
We also have an incident response plan that provides procedures for how we can detect, respond to, and recover from potential cybersecurity incidents, which include processes designed to triage, assess severity, escalate, contain, investigate, and remediate any incident, as well as to comply with any applicable legal obligations and mitigate potential brand and reputational damage.
Our information security program is regularly evaluated by internal and external experts with the results of those reviews reported to senior management, including the ELT and the FactSet Audit Committee, and, where appropriate, the Board of Directors (the "Board"). We also actively engage with key vendors, industry participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our information security policies and procedures.
The cybersecurity threat landscape is dynamic and volatile and requires significant investment. To date, risks from cybersecurity threats have not materially affected, and we do not believe are reasonably likely to materially affect, our business strategy, results of operations, or financial condition. As discussed more fully under Item 1A, Risk Factors in this Annual Report on Form 10-K, although our processes are designed to help identify, detect, prevent, respond to, and mitigate cybersecurity risks, cybersecurity threats are rapidly evolving and we may not be able to anticipate, prevent, or detect all such attacks and there is no guarantee that a future cybersecurity incident could not materially affect our business strategy, results of operations, or financial condition.
Cybersecurity Governance
Cybersecurity is an important part of our Audit Committee, Board and ELT’s risk management focus. The Board coordinates with the Audit Committee for active Board- and Committee-level oversight of the Company’s technology and cyber risk profile, cyber strategies and information security initiatives.
The Audit Committee monitors management’s responsibility in the area of risk oversight, including cybersecurity risks.At each regular meeting, the Audit Committee receives updates from the CISO, regarding trends, emergent risks to our technology infrastructure, major updates on security assessments and threat landscape, and the steps we are taking to respond to these matters. The CISO also provides an annual update to the Board, or as may otherwise be required.
Management has day-to-day responsibility for identifying risks facing FactSet, formulating risk management policies and procedures, managing our key risk exposures on a day-to-day basis and setting the right “tone at the top.” As part of this, the ERM and technology teams, including the CISO, also deliver regular updates to the ELT on cybersecurity and related matters.
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ITEM 2. PROPERTIES
As of August 31, 2025, we have 35 offices worldwide, including our corporate headquarters located at 45 Glover Avenue, Norwalk, Connecticut where we occupy 91,718 square feet of office space. These offices include our data content collection offices located in India and the Philippines. We also have two data centers that support our technological infrastructure located in the U.S.
Refer to the table set forth below for the listing of our leased office space by geographic location. We believe our existing and planned leased space is suitable and adequate for our current business needs. We regularly review our real estate footprint to best support our operations and should our real estate needs increase, we believe additional space will be available.
Segment Location
Americas Austin, Texas
Boston, Massachusetts
Charlotte, North Carolina
Chicago, Illinois
Lakewood, Colorado
Los Angeles, California
New York, New York
Norwalk, Connecticut
Piscataway, New Jersey
Reston, Virginia
San Francisco, California
Sao Paulo, Brazil
Toronto, Canada
Youngstown, Ohio
EMEA Amsterdam, the Netherlands
Dubai, United Arab Emirates
Frankfurt, Germany
Gothenburg, Sweden
London, England
Luxembourg, Luxembourg
Milan, Italy
Paris, France
Riga, Latvia
Sofia, Bulgaria
Stockholm, Sweden
Asia Pacific Chennai, India
Hong Kong SAR, China
Hyderabad, India
Manila, the Philippines
Melbourne, Australia
Mumbai, India
Shanghai, China
Singapore
Sydney, Australia
Tokyo, Japan
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ITEM 3. LEGAL PROCEEDINGS
From time to time, we are subject to legal proceedings, claims and litigation arising in the ordinary course of business. Based on currently available information, our management does not believe that the ultimate outcome of these unresolved matters against us, individually or in the aggregate, is likely to have a material adverse effect on our consolidated financial position, annual results of operations and cash flows. However, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. Refer to Part II, Item 8. Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K, for more information on contingent matters.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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Part II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is listed on the NYSE and NASDAQ under the symbol "FDS".
Holdersof Record – As of October 15, 2025, we had approximately 1,896 holders of record of our common stock. However, because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Dividends - We paid four quarterly dividends during fiscal 2025. In the third quarter of fiscal 2025, we increased our quarterly cash dividend from $1.04 to $1.10 per share. Future cash dividend payments are subject to final determination by our Board of Directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. Refer to Part II, Item 8. Note 13, Stockholders' Equity, in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K for more information on our dividends.
Recent Sales of Unregistered Securities
There were no sales of unregistered equity securities during fiscal 2025.
Issuer Purchases of Equity Securities
The following table provides a month-to-month summary of the share repurchase activity during the three months ended August 31, 2025:
(in thousands, except share and per share data)
(1)Includes 259,721 shares repurchased under the stock repurchase program, as well as 3,287 shares repurchased to satisfy withholding tax obligations due upon the vesting of stock-based awards.
(2)Amount excludes any excise tax imposed on corporate stock repurchases required under the Inflation Reduction Act of 2022.
(3)We had $0.5 million that remained authorized under our share repurchase program as of August 31, 2025, all of which expired upon the conclusion of fiscal 2025 and were not available for share repurchases after that date. On June 17, 2025, our Board of Directors authorized up to $400 million for share repurchases on or after September 1, 2025 through September 30, 2026. Repurchases may be made from time-to-time in the open market or via privately negotiated transactions, subject to market conditions. There is no defined number of shares to be repurchased over a specified timeframe through the life of our share repurchase program. It is expected that share repurchases will be paid using existing and future cash generated by operations. Refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources, of this Annual Report on Form 10-K for further discussion on our share repurchase program.
Securities Authorized for Issuance under Equity Compensation Plans
Refer to Part III, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, of this Annual Report on Form 10-K.
StockPerformanceGraph
The annual changes for the five-year period shown in the graph below assume $100 had been invested in our common stock, the S&P 500 Index, the Dow Jones U.S. Financial Services Index and the S&P 500 Financial Exchange and Data Index on August 31, 2020.
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The total cumulative dollar returns shown on the graph represent the value that such investments would have had on August 31, 2025. Stockholder returns over the indicated period are based on historical data and should not be considered indicative of future stockholder returns.
ITEM 6. RESERVED
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the Consolidated Financial Statements and related Notes included in Part II, Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, our Current Reports on Form 8-K and our other filings with the Securities and Exchange Commission. For a similar detailed discussion comparing fiscal 2024 and 2023, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the fiscal year ended August 31, 2024. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause such differences include, but are not limited to, those identified below and those discussed in Part I, Item 1A. Risk Factors of this Annual Report on Form 10-K.
Our MD&A is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented in the following sections:
•Executive Overview
•Annual Subscription Value ("ASV")
•Client and User Additions
•Employee Headcount
•Results of Operations
•Non-GAAP Financial Measures
•Liquidity and Capital Resources
•Off-Balance Sheet Arrangements
•Foreign Currency Exposure
•Critical Accounting Estimates
•New Accounting Pronouncements
Executive Overview
FactSet is a global financial digital platform and enterprise solutions provider with open and flexible technologies that deliver financial intelligence to investment professionals worldwide.
Our platform delivers expansive data, sophisticated analytics, and flexible, AI-powered technologies used by global financial professionals to power their critical investment workflows. As of August 31, 2025, we had approximately 9,000 clients comprised of over 237,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, partners, hedge funds, corporate users, and private equity and venture capital professionals. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected data and technology platform. Our products and services include workstations, portfolio analytics and enterprise data solutions. We also offer managed services that operate as an extension of our clients' internal teams to support data, performance, risk and reporting workflows.
We drive our business based on a detailed understanding of our clients’ workflows, which helps us to solve their most complex challenges. We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas and analyze, monitor and manage their portfolios. Our solutions span the investment lifecycle of investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting. We provide open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions, and APIs. AI is embedded across these offerings to enhance data discovery, automate routine workflows and improve the speed and accuracy of client insights. The CGS business supports security master files relied on by the investment industry for critical front, middle and back-office functions. All of our platforms and solutions are supported by our dedicated client service team.
We operate our business through three segments: the Americas, EMEA and Asia Pacific. Within each segment, we offer data, products and analytical applications by firm type: Institutional Buyside, Dealmakers, Wealth, and Partnerships and CGS.
Refer to Part I, Item 1. Business - Business Overview and Business Strategy and Part II, Item 8. Note 17, Segment Information, in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.
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Fiscal 2025 in Review
Revenues for fiscal 2025 were $2,321.7 million, an increase of 5.4% from the comparable prior year. The growth in revenues was driven by a 4.4% increase in organic revenues, a 0.9% increase from acquisition-related revenues and a net increase of 0.1% from foreign currency exchange rate fluctuations. Revenues increased in all our segments, primarily in the Americas. Revenues increased primarily from workstations and to a lesser extent, CGS and front office solutions. Refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Financial Measures, of this Annual Report on Form 10-K for a definition of organic revenues and a reconciliation between revenues and organic revenues.
As of August 31, 2025, organic annual subscription value ("Organic ASV") totaled $2,370.9 million, an increase of 5.7% over the prior year. Organic ASV increased in all our segments, with the majority of the increase in the Americas. Organic ASV growth was mainly driven by workstations, data solutions and, to a lesser extent, CGS. Refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, Annual Subscription Value, of this Annual Report on Form 10-K for the definition of Organic ASV.
Operating margin was 32.2% for fiscal 2025, compared with 31.8% for fiscal 2024. This increase in operating margin was mainly due to growth in revenues and, when expressed as a percentage of revenues, charges related to the Sales Tax Dispute that were recorded in the prior year, partially offset by higher amortization of intangible assets in the current year. Refer to Part II, Item 8. Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K for more information on the Sales Tax Dispute.
Net income for fiscal 2025 was $597.0 million, an increase of 11.2% from the prior year. Diluted earnings per common share ("Diluted EPS") for fiscal 2025 was $15.55, an increase of 11.8% compared with the prior year. The increase in Net income and Diluted EPS was primarily driven by higher operating income and a gain from the divestiture of a business.
We returned $460.4 million to our stockholders in the form of share repurchases and dividends during fiscal 2025.
As of August 31, 2025, our client and user counts were 8,996 and 237,324, respectively. Our employee headcount was 12,800 as of August 31, 2025, up 3.2% compared to the prior year. This increase was driven by net headcount growth of 6.0% in the Americas and 2.6% in each of EMEA and Asia Pacific.
Annual Subscription Value ("ASV")
We believe ASV reflects our ability to grow recurring revenues and generate positive cash flows, and thus serves as a key indicator of the successful execution of our business strategy.
–ASV at any point in time represents our forward-looking revenues for the next 12 months from all subscription services currently being supplied to clients.
–Organic ASV at any point in time equals our ASV excluding ASV from acquisitions and dispositions completed within the last 12 months and the effects of foreign currency movements.
Beginning in fiscal 2025, we are reporting Organic ASV, rather than Organic ASV plus professional services, to focus on the recurring nature of our revenues. This underscores the shift of our offerings toward providing more managed services and less project-based services.
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Organic ASV
The following table presents the calculation of Organic ASV as of August 31, 2025. With proper notice provided as contractually required, our clients can add to, delete portions of, or terminate service, subject to certain limitations.
(dollar amounts in millions) As of August 31, 2025
Impact from foreign currency movements (0.6)
Acquisition ASV(1) (34.1)
Organic ASV annual growth rate(2) 5.7 %
(1) ASV from acquisitions completed within the last 12 months.
(2) For comparability purposes, in calculating the organic ASV annual growth rate, the prior year excludes ASV from dispositions completed in the last 12 months.
As of August 31, 2025, Organic ASV was $2,370.9 million, an increase of 5.7% compared with August 31, 2024. Organic ASV increased in all our segments, with the majority of the increase in the Americas. The increase in Organic ASV was primarily due to higher sales to existing clients and, to a lesser extent, sales to new clients and price increases to existing clients, all primarily attributable to workstations, data solutions and, to a lesser extent, CGS. This increase was partially offset by existing client cancellations.
Segment ASV
As of August 31, 2025, ASV from the Americas represented 65% of total ASV and was $1,570.1 million, an increase from $1,455.4 million as of August 31, 2024. Americas Organic ASV was $1,541.9 million as of August 31, 2025, a 6.0% increase from the prior year. The Organic ASV increase in the Americas was primarily driven by workstations and, to a lesser extent, data solutions.
As of August 31, 2025, ASV from EMEA represented 25% of total ASV and was $591.6 million, an increase from $569.7 million as of August 31, 2024. EMEA Organic ASV was $586.3 million as of August 31, 2025, a 4.2% increase from the prior year. The EMEA Organic ASV increase was mainly from data solutions.
As of August 31, 2025, ASV from Asia Pacific represented 10% of total ASV and was $243.9 million, an increase from $230.3 million as of August 31, 2024. Asia Pacific Organic ASV was $242.7 million as of August 31, 2025, a 7.2% increase from the prior year. The Asia Pacific Organic ASV increase was primarily driven by data solutions and workstations.
Buy-side and Sell-side Organic ASV Growth
The buy-side and sell-side Organic ASV annual growth rates as of August 31, 2025 were 5.5% and 4.3%, respectively. Buy-side clients account for approximately 82% of our Organic ASV, consistent with the prior year, and primarily include institutional asset managers, wealth managers, asset owners, partners, hedge funds and corporate clients. The remaining Organic ASV is derived from sell-side firms and primarily include broker-dealers, banking and advisory firms, and private equity and venture capital firms.
Client and User Additions
The table below presents our total clients and users:
As of August 31,
(1)The client count includes clients with ASV of $10,000 and above.
(2)The user count does not reflect users associated with our fiscal 2025 acquisitions.
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Our total client count was 8,996 as of August 31, 2025, a net increase of 9.5% or 779 clients in the last 12 months, mainly due to an increase in corporate clients, primarily driven by clients from the Platform Group Limited ("Irwin") acquisition.
As of August 31, 2025, there were 237,324 professionals using FactSet, representing a net increase of 9.7% or 20,943 users in the last twelve months, primarily driven by an increase in wealth management users. The user count does not reflect our fiscal 2025 acquisitions.
Annual ASV retention was greater than 95% of ASV as of August 31, 2025 and August 31, 2024. When expressed as a percentage of clients, annual retention was 91% as of August 31, 2025, compared with 90% as of August 31, 2024.
Employee Headcount
As of August 31, 2025, our net employee headcount increased by 3.2% to 12,800, compared with 12,398 employees as of August 31, 2024. This net headcount increase was primarily in the technology and sales groups mainly driven by continued investment in our COEs, through an increase in employees based in the Philippines and India, and our Irwin and Liquid Holdings, LLC ("LiquidityBook") acquisitions.
As of August 31, 2025, compared to August 31, 2024, our net headcount growth was 6.0% in the Americas and 2.6% in each of EMEA and Asia Pacific. As of August 31, 2025, we had 8,854 employees located in Asia Pacific, 2,510 in the Americas and 1,436 in EMEA. Approximately 68% of our employees are located in our COEs.
Results of Operations
For an understanding of the significant factors that influenced our performance during fiscal 2025 and 2024, the following discussion should be read in conjunction with the Consolidated Financial Statements and related Notes presented in Part II, Item 8. in this Annual Report on Form 10-K.
The following table summarizes the results of operations for the years presented:
Years ended August 31,
(in thousands, except per share data) 2025 2024 % Change
Diluted weighted average common shares 38,385 38,618
Revenues
Revenues in fiscal 2025 were $2,321.7 million, an increase of 5.4%. This 5.4% growth in revenues was driven by a 4.4% increase in organic revenues which totaled $2,300.2 million for fiscal 2025, a 0.9% increase from acquisition-related revenues and a net increase of 0.1% from foreign currency exchange rate fluctuations. Revenues increased in all our geographic segments, primarily in the Americas. The increase in revenues was mainly from workstations and, to a lesser extent, CGS and front office solutions.
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Revenues by Segment
The following table summarizes our revenues by segment:
Years ended August 31,
(dollar amounts in thousands) 2025 2024 % Change
Americas
Revenues from the Americas increased 6.1% to $1,506.1 million in fiscal 2025, compared with $1,419.9 million in fiscal 2024. This 6.1% growth in revenues was driven by a 4.9% increase in organic revenues and a 1.2% increase from acquisition-related revenues. The increase in revenues was mainly driven by workstations and, to a lesser extent, front office solutions.
EMEA
Revenues from EMEA increased 3.0% to $580.3 million in fiscal 2025, compared with $563.2 million in fiscal 2024. This 3.0% growth in revenues was driven by a 2.5% increase in organic revenues, a 0.4% increase from acquisition-related revenues and a 0.1% net increase from foreign currency exchange rate fluctuations. The increase in revenues was primarily from data solutions and middle office solutions.
Asia Pacific
Revenues from Asia Pacific increased 7.0% to $235.3 million in fiscal 2025, compared with $220.0 million in fiscal 2024. This 7.0% was driven by a 6.3% increase in organic revenues, a 0.5% increase from acquisition-related revenues and a 0.2% net increase from foreign currency exchange rate fluctuations. The increase in revenues was mainly driven by data solutions, workstations and, to a lesser extent, front office solutions.
Operating Expenses
Principal Operating Expenses
Cost of services is mainly comprised of employee compensation costs and also includes expenses related to data costs, computer-related expenses, amortization of intangible assets, royalty fees, telecommunication costs and computer depreciation.
Selling, general and administrative ("SG&A") consists primarily of employee compensation costs and also includes expenses related to occupancy costs, professional fees, depreciation of furniture and fixtures, amortization of leasehold improvements, travel and entertainment expenses, marketing costs, other employee-related expenses, internal communication costs, bad debt expense, the impact from our foreign currency forward contracts and asset impairments.
Employee compensation costs are a major component of both our Cost of services and SG&A. These expenses primarily include costs related to salaries, incentive compensation and sales commissions, stock-based compensation, benefits, employment taxes and restructuring costs.
We assign employee compensation costs between Cost of services and SG&A based on the roles and activities associated with each employee. We categorize employees within the content collection, consulting, product development, software and systems engineering groups as Cost of services personnel. Employees included in our sales department and those that serve in various other support departments, including marketing, finance, legal, human resources and administrative services, are classified as SG&A.
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The following table summarizes the components of our total operating expenses and operating margin:
(dollar amounts in thousands) Years ended August 31,
Cost of Services
Cost of services increased 8.5% to $1,097.8 million in fiscal 2025, compared with $1,011.9 million in fiscal 2024, primarily due to an increase in amortization of intangible assets, employee compensation costs and computer-related expenses.
Cost of services, when expressed as a percentage of revenues, was 47.3% for fiscal 2025, an increase of 130 basis points compared with fiscal 2024. This increase was primarily from higher amortization of intangible assets, mainly driven by a 100 basis point increase in amortization from our capitalized internal-use software development costs.
Selling, General and Administrative
SG&A expenses decreased 2.9% to $475.7 million during fiscal 2025, compared with $489.8 million in fiscal 2024. The decrease was primarily attributable to charges related to the Sales Tax Dispute recorded in the prior year, partially offset by higher employee compensation costs and professional fees in the current year.
SG&A expenses, when expressed as a percentage of revenues, were 20.5% for fiscal 2025, a decrease of 170 basis points compared with fiscal 2024. This decrease was primarily due to charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher employee compensation costs and professional fees in the current year.
When expressed as a percentage of revenues:
•The charges related to the Sales Tax Dispute recorded in the prior year decreased SG&A by 240 basis points. Refer to Part II, Item 8. Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K for more information on the Sales Tax Dispute.
•Employee compensation costs increased by 80 basis points, mainly due to higher variable compensation costs driven by a lower bonus accrual during fiscal 2024.
•Professional fees increased by 60 basis points, mainly due to acquisition-related costs.
Operating Income and Operating Margin
Operating income increased 6.7% to $748.3 million in fiscal 2025, compared with $701.3 million in fiscal 2024. This increase was primarily driven by growth in revenues and charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher employee compensation costs and amortization of intangible assets in the current year.
Operating margin increased to 32.2% in fiscal 2025, compared with 31.8% in the prior year. This increase was primarily driven by growth in revenues and, when expressed as a percentage of revenues, charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher amortization of intangible assets in the current year.
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Operating Income by Segment
We operate our business through three segments: the Americas; EMEA; and Asia Pacific. Refer to Part II, Item 8. Note 17, Segment Information in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion regarding our segments. The following table summarizes our operating income by segment:
Years ended August 31,
(dollar amounts in thousands) 2025 2024 % Change
Americas
Americas operating income increased 16.9% to $306.0 million during fiscal 2025, compared with $261.8 million from the prior year. This increase was primarily due to growth in revenues of 6.1% and charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher amortization of intangible assets and employee compensation costs in the current year.
•The charge related to the Sales Tax Dispute in the prior year is discussed in Part II, Item 8. Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K.
•Amortization of intangible assets increased mainly due to higher amortization from our capitalized internal-use software development costs.
•Employee compensation costs increased primarily due to higher variable compensation costs driven by a lower bonus accrual during fiscal 2024.
EMEA
EMEA operating income decreased 3.2% to $274.0 million during fiscal 2025, compared with $283.0 million from the prior year. This decrease was primarily due to higher employee compensation costs, partially offset by growth in revenues of 3.0%. Employee compensation costs increased primarily due to higher annual base salaries, driven by an increase in annual merit and net headcount growth of 37 employees, and, to a lesser extent, variable compensation costs mainly due to a lower bonus accrual during fiscal 2024.
Asia Pacific
Asia Pacific operating income increased 7.5% to $168.3 million during fiscal 2025, compared with $156.5 million from the prior year. This increase was mainly due to growth in revenues of 7.0%, partially offset by higher employee compensation costs. Employee compensation costs increased primarily due to higher annual base salaries, driven by annual merit increases and a net headcount increase of 222 employees, and higher variable compensation costs mainly due to a lower bonus accrual during fiscal 2024.
Income Taxes
The provision for income taxes and the effective tax rate are as follows:
Years ended August 31,
(dollar amounts in thousands) 2025 2024 % Change
We are subject to taxation in the U.S. and various state, local and foreign jurisdictions in which we conduct our business. Our effective tax rate will vary based on, among other factors, changes in levels of foreign income, as well as other non-recurring events.
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Our effective tax rate for fiscal 2025 was 17.2% compared with 17.6% for fiscal 2024. This decrease was primarily due to a lower U.S. tax impact of foreign earnings. All local, federal and foreign taxes payable were paid in a timely manner, subject to normal audits of open years.
For the periods presented, our effective tax rates were lower than the applicable U.S. corporate income tax rate. This was primarily attributable to excess tax benefits from stock-based compensation, a lower U.S. tax impact of foreign earnings, research and development ("R&D") tax credits and a foreign derived intangible income ("FDII") tax deduction, partially offset by our state income taxes.
Net Income and Diluted EPS
Years ended August 31,
(in thousands, except per share data) 2025 2024 % Change
The increase in Net income and Diluted EPS for fiscal 2025, compared with fiscal 2024, was primarily driven by higher operating income and a gain from the divestiture of a business.
Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States ("GAAP"), we use non-GAAP financial measures including organic revenues, adjusted operating income, adjusted operating margin, adjusted net income, EBITDA, adjusted EBITDA, adjusted Diluted EPS and free cash flow. Reconciliations from our financial measures calculated and presented in accordance with GAAP to these non-GAAP financial measures are shown in the tables below, and the reconciliation of free cash flow is included in the Liquidity and Capital Resources section. These non-GAAP financial measures should not be considered in isolation from, as a substitute for, or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of our business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
Despite the limitations of these non-GAAP financial measures, we believe these adjusted financial measures and the information they provide are useful in viewing our performance using the same tools that management uses to gauge progress in achieving our goals. Adjusted measures may also facilitate comparisons to our historical performance.
Organic revenues excludes the current year impact of revenues from acquisitions and dispositions completed within the past 12 months ("Acquisition revenues" and "Disposition revenues", respectively) and the current year impact from changes in foreign currency. In addition, for our year to date comparisons, organic revenues also excludes current year revenues that were incurred prior to the first anniversary date of an acquisition. The table below provides an unaudited reconciliation of revenues to organic revenues:
Years ended August 31,
(dollar amounts in thousands) 2025 2024 % Change
Acquisition revenues (20,663) —
Currency impact (901) —
The table below provides an unaudited reconciliation of Operating income, operating margin, Net income and Diluted EPS to adjusted operating income, adjusted operating margin, adjusted net income, EBITDA, adjusted EBITDA and adjusted Diluted EPS. Adjusted operating income and margin, adjusted net income, and adjusted Diluted EPS exclude the impact of acquisition-related intangible asset amortization and non-recurring items. EBITDA represents earnings before interest expense, provision for income taxes and depreciation and amortization, while adjusted EBITDA further excludes non-recurring non-cash expenses.
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Years ended August 31,
(in thousands, except per share data) 2025 2024 % Change
Business divestiture, acquisitions and related costs 17,761 884
Executive search costs 1,675 —
Asset impairment — 3,443
Adjusted operating margin(2) 36.3 % 37.8 %
Gain on business divestiture (17,205) —
Business divestiture, acquisitions and related costs 13,150 650
Executive search costs 1,240 —
Asset impairment — 2,531
Non-recurring non-cash expenses — 5,070
Intangible asset amortization 1.41 1.27
Gain on business divestiture (0.45) —
Business divestiture, acquisitions and related costs 0.34 0.02
Executive search costs 0.03 —
Restructuring/severance 0.01 0.11
Asset impairment — 0.07
Weighted average common shares (diluted) 38,385 38,618
(1)Related to a resolved matter with the Massachusetts Department of Revenue. Refer to Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in Part II, Item 8. of this Annual Report on Form 10-K, for further discussion on this matter.
(2)Adjusted operating margin is calculated as Adjusted operating income divided by Revenues.
(3)For purposes of calculating Adjusted net income and Adjusted Diluted EPS, all adjustments were taxed at an adjusted tax rate of 26.0% and 26.5% for fiscal 2025 and fiscal 2024, respectively.
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Liquidity and Capital Resources
As of August 31, 2025, Cash and cash equivalents were $337.7 million and restricted cash was $14.0 million, compared with Cash and cash equivalents of $423.0 million as of August 31, 2024. Refer to Summary of Cash Flows within this section below, for more information on cash flows during fiscal 2025 and 2024. Our Cash and cash equivalents as of August 31, 2025 are held in numerous locations throughout the world, with $169.8 million in EMEA (with the largest balance held in the UK), $106.1 million in the Americas and the remaining $61.8 million in Asia Pacific (with the largest balance held in the Philippines).
As of August 31, 2025, we had $486.9 million of undistributed foreign earnings of which $69.1 million are permanently reinvested. It is our intent to permanently reinvest all foreign undistributed earnings, except in jurisdictions where earnings can be repatriated substantially free of tax. It is not practicable to determine the deferred tax liability that would be payable if these earnings were repatriated to the U.S.
Our cash flows provided by operating activities, existing cash and cash equivalents, supplemented with our debt borrowings, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our operations. Generally, some or all of our remaining available cash flows have been used to, among other things, service our existing and future debt obligations, satisfy our working capital requirements and fund various activities, including our capital expenditures, acquisitions, investments, dividend payments and repurchases of our common stock. Based on past performance and current expectations, we believe our sources of liquidity, including the available capacity under our existing revolving credit facility and other financing alternatives, will provide us the necessary capital to fund these transactions and achieve our planned growth for the next 12 months and the foreseeable future. We are exposed to credit risk for our cash, cash equivalents and restricted cash held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits; however, we do not believe our concentration of cash, cash equivalents and restricted cash presents a significant credit risk as the counterparties to the instruments consist of multiple high-quality, credit-worthy financial institutions.
Sources of Liquidity
Debt and Swap Agreements
2025 Credit Agreement
On April 8, 2025, we entered into a credit agreement (the "2025 Credit Agreement") and borrowed $500.0 million under a senior unsecured term loan credit facility (the "2025 Term Facility"). We used the proceeds from the 2025 Term Facility borrowing to repay the outstanding balance under the 2022 Revolving Facility (as defined below). The 2025 Credit Agreement also provides for a $1.0 billion senior unsecured revolving credit facility (the "2025 Revolving Facility"). The 2025 Revolving Facility, together with the 2025 Term Facility, are referred to as the "2025 Credit Facilities".
The 2025 Term Facility matures on April 8, 2028, and the 2025 Revolving Facility matures on April 8, 2030. The 2025 Revolving Facility provides for up to $100.0 million in the form of letters of credit and up to $100.0 million in the form of swingline loans. We may seek additional commitments of up to $1.0 billion under the 2025 Revolving Facility from lenders or other financial institutions.
The 2025 Term Facility is subject to scheduled quarterly principal payments, commencing on August 31, 2025, with each quarterly principal payment equal to 1.25% of the original principal amount of the 2025 Term Facility. The 2025 Credit Facilities are not otherwise subject to any other mandatory repayments. We may voluntarily prepay loans under the 2025 Credit Facilities at any time without premium or penalty. Prepayments of the 2025 Term Facility shall be applied to reduce the subsequent scheduled quarterly principal payments in direct order of maturity.
During fiscal 2025, we repaid $125.0 million under the 2025 Term Facility. This included $68.8 million to satisfy all scheduled quarterly principal payments from loan inception through maturity, eliminating any future mandatory quarterly principal payment requirements. The remaining $56.2 million was made as a voluntary prepayment. From the effective date of the 2025 Revolving Facility through August 31, 2025, we have had no borrowings under the 2025 Revolving Facility.
From the borrowing date through August 31, 2025, the outstanding borrowings under the 2025 Credit Facilities bore interest at a rate equal to the applicable one-month Term Secured Overnight Financing Rate ("SOFR") plus a 0.975% spread (comprised of a 0.875% interest rate margin, based on a pricing grid determined by reference to our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio, plus a 0.1% credit spread adjustment).
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We pay a commitment fee on the daily unused amount of the 2025 Revolving Facility using a pricing grid based on our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio. The commitment fee remained consistent at 0.1% through August 31, 2025.
Debt issuance costs related to the 2025 Credit Facilities were $3.4 million. These debt issuance costs are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability for the 2025 Term Facility and within Other assets for the 2025 Revolving Facility. Debt issuance costs are amortized to Interest expense in the Consolidated Statements of Income on a straight-line basis over the contractual term of the debt (which approximates the effective interest method for the 2025 Term Facility).
The 2025 Credit Agreement contains usual and customary event of default provisions for facilities of this type, which are subject to usual and customary grace periods and materiality thresholds. If an event of default occurs under the 2025 Credit Agreement, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings immediately due and payable.
The 2025 Credit Agreement contains usual and customary affirmative and negative covenants for facilities of this type, including a financial covenant requiring maintenance of a total leverage ratio of no greater than 3.75 to 1.00 as of the last day of each fiscal quarter (subject to an increase to 4.25 to 1.00 for five consecutive fiscal quarters in connection with certain material acquisitions). We were in compliance with all covenants and requirements of the 2025 Credit Agreement as of August 31, 2025.
2022 Credit Agreement
On March 1, 2022, we entered into a credit agreement (the "2022 Credit Agreement") and borrowed $1.0 billion under a senior unsecured term loan credit facility (the "2022 Term Facility") and $250.0 million of the available $500.0 million under a senior unsecured revolving credit facility (the "2022 Revolving Facility"). The 2022 Revolving Facility, together with the 2022 Term Facility, are referred to as the "2022 Credit Facilities". On January 31, 2025, we entered into a joinder agreement to our 2022 Credit Agreement pursuant to which commitments under the 2022 Revolving Facility were increased by $100.0 million, to a total of $600.0 million. All other terms of the 2022 Credit Agreement remained unchanged.
The 2022 Term Facility, originally due to mature on March 1, 2025, was repaid in full following $125.0 million of repayments made during the six months ended February 28, 2025. During fiscal 2025, we borrowed $305.0 million and repaid $555.0 million under the 2022 Revolving Facility. The 2022 Credit Agreement was terminated on April 8, 2025, concurrent with entering into the 2025 Credit Agreement.
Borrowings previously outstanding under the 2022 Credit Facilities bore interest at a rate equal to the applicable one-month Term SOFR plus a spread, using a debt leverage pricing grid and a credit spread adjustment (with total spread ranging from 0.975% to 1.1% over the term of the debt).
Interest Rate Swap Agreements
We leverage interest rate swap agreements to manage our floating interest rate exposure with a fixed interest rate. Our interest rate swap agreements are designated as cash flow hedges at inception.
2025 Swap Agreement
On April 24, 2025, we entered into an interest rate swap agreement ("2025 Swap Agreement") with a notional amount of $200.0 million to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 4.086%. The notional amount of the 2025 Swap Agreement declines by $50.0 million on a quarterly basis beginning May 31, 2025 and matures on February 28, 2026. As of August 31, 2025, the notional amount of the 2025 Swap Agreement was $100.0 million.
2024 Swap Agreement
On March 1, 2024, we entered into an interest rate swap agreement ("2024 Swap Agreement") with a notional amount of $200.0 million to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 5.145%. The notional amount of the 2024 Swap Agreement declined by $50.0 million on a quarterly basis beginning May 31, 2024. The 2024 Swap Agreement matured on February 28, 2025.
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2022 Swap Agreement
On March 1, 2022, we entered into an interest rate swap agreement ("2022 Swap Agreement") with a notional amount of $800.0 million to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 1.162%. The notional amount of the 2022 Swap Agreement declined by $100.0 million on a quarterly basis beginning May 31, 2022. The 2022 Swap Agreement matured on February 28, 2024.
Refer to Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, in this Annual Report on Form 10-K, for further discussion of our exposure to interest rate risk on our outstanding floating rate debt.
Senior Notes
On March 1, 2022, we completed a public offering issuing $500.0 million of 2.900% Senior Notes due March 1, 2027 (the "2027 Notes") and $500.0 million of 3.450% Senior Notes due March 1, 2032 (the "2032 Notes" and, together with the 2027 Notes, the "Senior Notes"). The Senior Notes were issued pursuant to an indenture, dated as of March 1, 2022, by and between us and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as supplemented by the supplemental indenture, dated as of March 1, 2022, between us and the Trustee (the "Supplemental Indenture").
The Senior Notes were issued at an aggregate discount of $2.8 million and we incurred approximately $9.1 million in debt issuance costs during fiscal 2022. Debt discounts and debt issuance costs are presented in the Consolidated Balance Sheets as a net direct deduction from the carrying amount of the debt liability. The debt discounts and debt issuance costs are amortized to Interest expense in the Consolidated Statements of Income over the contractual term of the debt, leveraging the effective interest method.
Interest on the Senior Notes is payable semiannually in arrears on March 1 and September 1 of each year.
We may redeem the Senior Notes, in whole or in part, at any time at specified redemption prices, plus any accrued and unpaid interest. Upon the occurrence of a change of control triggering event (as defined in the Supplemental Indenture), we must offer to repurchase the Senior Notes at 101% of their principal amount, plus any accrued and unpaid interest.
Uses of Liquidity
Returning Value to Stockholders
We returned $460.4 million and $385.9 million to our stockholders in the form of share repurchases and dividends during fiscal 2025 and 2024, respectively.
Share Repurchase Program
We may repurchase shares of our common stock under our share repurchase program from time-to-time in the open market or via privately negotiated transactions, subject to market conditions. During fiscal 2025 and 2024, we repurchased 684,960 shares for $300.5 million and 537,800 shares for $235.2 million, respectively.
There is no defined number of shares to be repurchased over a specified timeframe through the life of our share repurchase program. On September 17, 2024, our Board of Directors approved a new share repurchase authorization of up to $300 million in aggregate, which was available during fiscal 2025. This authorization expired upon the conclusion of fiscal 2025 and was not available for share repurchases after that date.
On June 17, 2025, our Board of Directors authorized up to $400 million for share repurchases on or after September 1, 2025 through September 30, 2026.
Refer to Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, of this Annual Report on Form 10-K for further discussion on our share repurchase program.
Dividends
During fiscal 2025 and 2024, we paid dividends of $160.0 million and $150.7 million, respectively. In the third quarter of fiscal 2025, our Board of Directors approved a 6% increase in the regular quarterly dividend from $1.04 to $1.10 per share. Fiscal 2025 marked the 26th consecutive fiscal year we have increased dividends on a stock split-adjusted basis, highlighting our continued commitment to returning value to our stockholders. Future cash dividend payments are subject to final determination by our Board of Directors and will depend on our earnings, capital requirements, financial condition and other relevant factors.
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Capital Expenditures
For the year ended August 31, 2025, capital expenditures increased by 27.0% to $108.8 million, compared with $85.7 million in fiscal 2024. This increase was primarily due to higher capitalized costs related to the development of our internal-use software.
Acquisitions
Our acquisitions with the most significant cash flows from fiscal 2023 through fiscal 2025 included Liquid Holdings, LLC ("LiquidityBook") and Platform Group Limited ("Irwin"). Refer to Part II, Item 8. Note 5, Acquisitions in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion of these acquisitions.
LiquidityBook
On February 7, 2025 we completed the acquisition of LiquidityBook for a purchase price of $243.2 million, net of cash acquired, and inclusive of preliminary working capital adjustments. The purchase price includes contingent consideration of $11.9 million, which reflects the acquisition date fair value of potential future payments that are contingent upon the achievement of certain specified milestones.
LiquidityBook provides cloud-native trading solutions to hedge fund, asset and wealth management, outsourced trading, and sell-side middle office clients. LiquidityBook operates a proprietary FIX network that enables streamlined connectivity to over 200 brokers and order routing to more than 1,600 destinations across 80 markets globally. This acquisition adds technology-forward order management and investment book of record capabilities and enhances FactSet’s ability to serve the integrated workflow needs of clients across the portfolio life cycle.
Irwin
On November 5, 2024, we completed the acquisition of Irwin for a purchase price of $120.2 million, net of cash acquired, and inclusive of working capital adjustments. The purchase price includes contingent consideration of $9.6 million, which reflects the acquisition date fair value of potential future payments that are contingent upon the achievement of certain specified milestones. We finalized the purchase accounting for the Irwin acquisition during the third quarter of fiscal 2025.
Irwin is a leading investor relations and capital markets platform for public companies and their advisors. This acquisition builds on a recent successful partnership between FactSet and Irwin, and expands our ability to address the holistic workflow needs of investor relations professionals with an integrated, modern solution.
Contractual Obligations
Purchase obligations represent our legally-binding agreements to purchase fixed or minimum quantities at determinable prices. As of August 31, 2025 and 2024, we had total purchase obligations with suppliers and vendors of approximately $352 million and $383 million, respectively. Our total purchase obligations as of August 31, 2025 and 2024 primarily related to hosting services, acquisition of data and, to a lesser extent, third-party software providers.
We also have contractual obligations related to our lease liabilities and outstanding debt. Refer to Part II, Item 8. Note 10, Leases and Note 11, Debt in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for information regarding our lease commitments and outstanding debt obligations, respectively.
Summary of Cash Flows
The following table provides a summary of our net cash flow activity for the fiscal years presented:
Years ended August 31,
(dollar amounts in thousands) 2025 2024 $ Change
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Operating
For fiscal 2025, net cash provided by operating activities was $726.3 million, which included net income of $597.0 million, non-cash charges of $235.0 million and a net cash outflow of $105.7 million to support our working capital requirements. The non-cash charges were primarily driven by depreciation and amortization. The change in our working capital was primarily driven by cash outflows related to payments to resolve the Sales Tax Dispute, timing of vendor payments and client collections, as well as lease payments.
For fiscal 2024, net cash provided by operating activities was $700.3 million, which included net income of $537.1 million, non-cash charges of $201.6 million and a net cash outflow of $38.4 million to support our working capital requirements. The non-cash charges were primarily driven by depreciation and amortization and, to a lesser extent, stock-based compensation expense. The change in our working capital was primarily driven by cash outflows related to lease payments and prepaid expenses, partially offset by the timing of payments to vendors.
Investing
For fiscal 2025, net cash used in investing activities was $392.8 million. The cash used in investing activities primarily consisted of $348.3 million of acquisition-related consideration related mainly to the Irwin and LiquidityBook transactions, $108.8 million ofcapital expenditures mainly driven by the capitalization of internal-use software development costs, partially offset by $58.2 million in proceeds from our investments in mutual funds.
For fiscal 2024, net cash used in investing activities was $144.3 million. The cash used in investing activities was primarily related to capital expenditures of $85.7 million, mainly driven by the capitalization of internal-use software development costs and $58.6 million in investments, primarily related to the purchase of mutual funds.
Financing
For fiscal 2025, net cash used in financing activities was $407.8 million, consisting mainly of $805.0 million related primarily to the repayment of the 2022 Credit Facilities, $300.5 million of share repurchases and $160.0 million of dividend payments, partially offset by $803.4 million of proceeds from borrowings under the 2025 Term Facility and the 2022 Revolving Facility, in periods prior to its termination, and $81.7 million of proceeds from employee stock plans.
For fiscal 2024, net cash used in financing activities was $560.9 million, consisting mainly of $250.0 million related to the partial repayment of the 2022 Term Facility, $235.2 million of share repurchases and $150.7 million of dividend payments, partially offset by $91.7 million of proceeds from employee stock plans.
Free Cash Flow
We define free cash flow, a non-GAAP financial measure, as cash provided by operating activities, less purchases of property, equipment and leasehold improvements ("PPE") and capitalized internal-use software. We believe free cash flow is a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures, can be used for strategic opportunities, including returning value to stockholders, investing in our business, making strategic acquisitions, and strengthening the balance sheet. Free cash flow should be considered in addition to consolidated net income and net cash provided by operating activities, but should not be used as a substitute for these key measures of our performance and liquidity.
The following table reconciles our net cash provided by operating activities to free cash flow:
Years ended August 31,
(dollar amounts in thousands) 2025 2024 $ Change
We generated free cash flow of $617.5 million during fiscal 2025, an increase of $2.8 million compared with fiscal 2024. This increase was driven by $25.9 million in cash provided by operating activities, partially offset by higher PPE mainly from capitalized costs related to the development of our internal-use software.
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Off-Balance Sheet Arrangements
As of August 31, 2025 and August 31, 2024, we had no off-balance sheet financing other than letters of credit incurred in the ordinary course of business. Refer to Part II, Item 8. Note 11, Debt andNote 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for more information on our letters of credit.
As of August 31, 2025 and August 31, 2024, we also had no other arrangements with unconsolidated entities or financial partnerships (such as entities often referred to as structured finance or special purpose entities) established for purposes of facilitating off-balance sheet financing, other debt arrangements, or other contractually limited purposes.
Foreign Currency Exposure
As we operate globally, we are exposed to the risk that our financial condition, results of operations and cash flows could be impacted by changes in foreign currency exchange rates. During fiscal 2025 and 2024, we maintained a series of foreign currency forward contracts to hedge a portion of our projected operating expenses in our primary currency exposures, namely the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso. As of August 31, 2025, the hedge maturity periods of our outstanding foreign currency forward contracts range from the first quarter of fiscal 2026 through the fourth quarter of fiscal 2026.
Refer to Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in this Annual Report on Form 10-K for more information on our foreign currency exposures.
Critical Accounting Estimates
We prepare the Consolidated Financial Statements in conformity with GAAP, which requires us to make certain estimates and apply judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. We base our estimates on historical experience and other assumptions that we believe to be reasonable at the time the Consolidated Financial Statements are prepared and, as such, they may ultimately differ materially from actual results.
We describe our significant accounting policies in Part II, Item 8. Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
The Audit Committee of our Board of Directors reviews the development and selection of our critical accounting estimates. The critical accounting estimates and judgments that we believe to have the most significant impacts to our Consolidated Financial Statements are described below.
Income Taxes
We are subject to taxation in the U.S. and various state, local and foreign jurisdictions in which we conduct our business. Our provision for income taxes is an estimate based on our understanding of laws in these federal, state, local and foreign tax jurisdictions. These laws can be complicated and are difficult to apply to any business. The tax laws also require us to allocate our taxable income to many jurisdictions based on subjective allocation methodologies and information collection processes.
Our provision for income taxes is subject to volatility and could be adversely impacted by numerous factors such as changes in earnings or tax laws, regulations, or accounting principles, including accounting for uncertain tax positions or interpretations of them. Significant judgment is required in determining our provision for income taxes, deferred tax assets and liabilities and unrecognized tax benefits.
Further, as a result of certain ongoing employment and capital investment actions and commitments, our income in certain countries is subject to reduced tax rates. Our failure to meet these employment and capital investment actions and commitments could adversely affect our provision for income taxes. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not adversely impact our operating results and financial condition.
Significant judgment is required in determining our uncertain tax positions. We follow a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not (defined as a likelihood of more than 50%) that a tax position will be sustained based on its technical merits as of the reporting date. The second step, for those positions that meet the recognition
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criteria, is to measure and recognize the largest amount of benefit that is greater than 50% likely of being realized upon effective settlement with a taxing authority. As the determination of liabilities related to uncertain tax positions and associated interest and penalties requires significant estimates and assumptions, there can be no assurance that we will accurately predict the outcomes of these audits. For this reason and due to ongoing audits by multiple tax authorities, we regularly engage in discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made. We accrue interest on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Provision for income taxes on our Consolidated Statements of Income includes the impact of changes to reserves and any related interest. We have no reason to believe that such audits will result in the payment of additional taxes and/or penalties that would have a material adverse effect on our results of operations or financial position, beyond current estimates.
Refer to Part II, Item 8. Note 9, Income Taxes in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.
Stock-based Compensation
We measure and recognize stock-based compensation expense for all stock-based awards and purchases of common stock under the employee stock purchase plan ("ESPP") based on their estimated grant date fair value.
We utilize a lattice-binomial option-pricing model ("binomial model") to estimate the grant date fair value for our employee stock options and the Black-Scholes model to estimate the grant date fair value for stock options granted to the members of the Board of Directors ("non-employee directors") and common stock purchased by eligible employees under our ESPP.
Both the binomial model and Black-Scholes model involve certain estimates and assumptions such as:
•Risk-free interest rate- based on the U.S. Treasury yield curve in effect at the time of grant with maturities equal to the expected terms of the stock-based awards granted.
•Expected life -the weighted average period the stock-based awards are expected to remain outstanding.
•Expected volatility- based on a blend of historical volatility of the stock-based award's useful life and the weighted average implied volatility for call option contracts traded in the 90 days preceding the stock-based award's valuation date.
•Dividend yield -the expectation of dividend payouts based on our history.
The binomial model also incorporates market conditions, vesting restrictions and exercise patterns.
For our performance share units ("PSUs"), management makes quarterly assessments of the probability of achieving specified performance criteria established at the time of grant. The ultimate number of common shares that may be earned from a PSU is determined pursuant to a payout range based on the achievement of specified performance levels.
We estimate expected forfeitures of equity awards at the date of grant and recognize compensation expense only for those awards expected to vest. The forfeiture assumption is revised if actual forfeitures differ from those estimates.
The assumptions we use to calculate and account for stock-based compensation awards represent management's best estimates, which involve inherent uncertainties. As a result, if we revise our assumptions and estimates, our stock-based compensation expense could differ from amounts recorded.
Refer to Part II, Item 8. Note 15, Stock-Based Compensation in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired at the acquisition date. Goodwill is not amortized as it is estimated to have an indefinite life. We test goodwill annually for impairment during the fourth quarter of each fiscal year or more frequently if events and circumstances occur indicating that it is more likely than not that the fair value of any one of our reporting units is less than its respective carrying value. Impairment is tested at the reporting unit level and if the carrying value of the reporting unit exceeds the fair value, then the goodwill is considered impaired and written down to the reporting unit’s fair value. The impairment loss for the reporting unit cannot exceed the carrying value of the goodwill allocated to that reporting unit.
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We may elect to perform a qualitative analysis for the reporting units to determine whether it is more likely than not (a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. In performing a qualitative assessment, we consider such factors as macro-economic conditions, industry and market conditions in which we operate, including the competitive environment and significant changes in demand for our products or services. We also consider the share price both in absolute terms and in relation to peer companies. If the qualitative analysis indicates that it is more likely than not the fair value of a reporting unit is less than its carrying value or if we elect not to perform a qualitative analysis, a quantitative analysis is performed to determine whether a goodwill impairment exists.
The quantitative goodwill impairment analysis is used to identify potential impairment by comparing the carrying value of a reporting unit with its fair value. To perform this analysis, we apply the income approach which utilizes discounted cash flows and other relevant market information. Significant judgment is involved in determining the assumptions used in estimating future cash flows, such as: expected sales, working capital needs to support each reporting unit, capital expenditures and related depreciation and amortization, operating expenses, expected tax rates and the weighted average cost of capital for each reporting unit. Our cost of capital is based on assumptions about interest rates, as well as a risk-adjusted rate of return required by our equity investors. These estimates and judgments are critical, as they directly influence the calculated fair value of our reporting units and, consequently, the results of our goodwill impairment assessment.
Refer to Part II, Item 8. Note 7, Goodwill in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further details.
Business Combinations
We account for business combinations using the purchase method of accounting. Under this method, the acquisition purchase price is allocated to the underlying identified tangible and intangible assets acquired, and liabilities assumed, based on their respective estimated fair values on the acquisition date. The excess of the purchase consideration over the fair value of the identified assets and liabilities is recorded as goodwill and assigned to one or more reporting units. The value and useful life assigned to acquisition-related tangible and intangible assets impact the amount and timing of future amortization expense. Determining the fair value of assets acquired and liabilities assumed and the expected useful life requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. Acquisition-related expenses and restructuring costs, if any, are recognized separately from the business combination and are expensed as incurred.
Refer to Part II, Item 8. Note 5, Acquisitions in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.
PPE and Intangible Assets
We amortize our PPE and identifiable intangible assets over their estimated useful lives. Determining the useful life requires judgment and an understanding of our planned use of the asset, among other factors. If different useful lives had been used, the resulting amortization or depreciation expense recognized may be materially different. If the estimate of the remaining useful life is changed, the remaining carrying amount of the PPE and intangible asset is, respectively, amortized or depreciated, prospectively over that revised remaining useful life.
We review our PPE and intangible assets to determine if any indicators of impairment are present on a quarterly basis or whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If indicators of impairment are present, the asset group is tested for impairment by comparing the carrying value to undiscounted cash flows and, if impaired, written down to fair value based on discounted cash flows. In performing this assessment, significant judgment is involved in determining the assumptions used in estimating future cash flows and the discount rate.
Refer to Part II, Item 8. Note 6, Property, Equipment and Leasehold Improvements andNote 8, Intangible Assets in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.
Contingencies
We are subject to various legal proceedings, claims and litigation that have arisen in the ordinary course of business, which involve inherent uncertainties. We accrue for contingencies when we believe that a loss is probable and the amount can be reasonably estimated. Judgment is required to determine both the probability and the estimated amount of loss. If the reasonable estimate of a probable loss is a range, we record an accrual for the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. We review these accruals on a quarterly basis and adjust, as necessary, to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other current information. If actual results differ from our assessments, our financial position, results of operations, or cash flows would be
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affected. Refer to Part II, Item 8. Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for more information on our contingent matters.
For more information on the accounting of our income tax contingencies, refer to Part II, Item 8. Note 9, Income Taxes in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
New Accounting Pronouncements
For a discussion of accounting pronouncements recently adopted and those issued but not yet adopted, refer to Part II, Item 8. Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, we are exposed to foreign currency exchange risk and interest rate risk that could impact our financial position and results of operations. Current market events have not required us to materially modify our financial risk management strategies with respect to our exposures to foreign currency exchange risk or interest rate risk.
Foreign Currency Transaction Risk
As we operate globally, we are exposed to the risk that our financial condition, results of operations and cash flows could be impacted by changes in foreign currency exchange rates. During fiscal 2025 and 2024, we maintained a series of foreign currency forward contracts to hedge a portion of our projected operating expenses in these primary currency exposures, namely the British Pound Sterling, Euro, Indian Rupee and Philippine Peso. As of August 31, 2025, the hedge maturity periods of our outstanding foreign currency forward contracts range from the first quarter of fiscal 2026 through the fourth quarter of fiscal 2026. Based on the operating income for fiscal 2025, comparing the average quarterly foreign currency exchange rates for fiscal 2025 to the respective rates for fiscal 2024, net of hedge activity, resulted in an increase in operating income of $0.3 million. We utilize cash flow hedges to manage risk and not for speculative or trading purposes.
We performed a sensitivity analysis to determine the effects on both the fair value of our outstanding foreign currency forward contracts and our operating income, excluding these forward contracts, of a hypothetical devaluation of the U.S. dollar by 10% as of August 31, 2025, relative to the other foreign currencies in which we transact. The sensitivity analysis indicated that a devaluation of the U.S. dollar by 10% would have increased the fair value of our outstanding forward contracts by approximately $19 million as of August 31, 2025 and decreased our operating income, excluding these forward contracts, by an estimated $47 million for fiscal 2025. This sensitivity analysis has inherent limitations as it disregards the possibility that rates of multiple foreign currencies will not always move in the same direction relative to the value of the U.S. dollar over time and does not account for our forward contracts that we utilize to mitigate fluctuations in exchange rates.
Foreign Currency Translation Risk
We are exposed to foreign currency risk due to the translation of our results from certain international operations into U.S. Dollars, as part of the consolidation process. Fluctuations in foreign currency exchange rates can create volatility in our results of operations and our financial condition.
The following table reflects the foreign currency translation adjustment gains and losses recorded in Other comprehensive income (loss):
Years ended August 31,
Foreign currency translation adjustment gains (losses) $ 15,565 $ 8,565
Interest Rate Risk
Cash and Cash Equivalents and Investments
As of August 31, 2025, we had Cash and cash equivalents of $337.7 million and Investments of $17.4 million. Our Cash and cash equivalents consist of cash and highly liquid investments including demand deposits and money market funds and our Investments consist of mutual funds. We are exposed to interest rate risk through fluctuations of interest rates on these investments. As we have a restrictive investment policy, our financial exposure to fluctuations in interest rates is expected to remain low. Refer to Part II, Item 8. Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for more information on our Cash and cash equivalents.
Debt
2025 Credit Agreement
As of August 31, 2025, our outstanding floating rate debt included $375.0 million under the 2025 Credit Agreement. As of August 31, 2025, the outstanding borrowings under the 2025 Credit Agreement bore interest at a rate equal to the applicable
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one-month Term SOFR plus a 0.975% spread (comprised of a 0.875% interest rate margin based on a debt leverage pricing grid plus a 0.1% credit spread adjustment).
To mitigate our exposure to interest rate volatility due to changes in SOFR, we entered into the 2025 Swap Agreement on April 24, 2025, to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 4.086%. As of August 31, 2025, the 2025 Swap Agreement has a notional amount of $100.0 million and matures on February 28, 2026.
Our Senior Notes have a fixed interest rate and are not subject to interest rate change. As such, our interest rate exposure as of August 31, 2025 is limited to the outstanding principal balance of our floating rate debt under our 2025 Credit Facilities in excess of the 2025 Swap Agreement. As of August 31, 2025, our interest rate exposure equals the Term SOFR applied to $275.0 million, our outstanding floating rate debt, net of our 2025 Swap Agreement. Assuming the principal balance of our outstanding floating rate debt, net of the 2025 Swap Agreement, remained at $275.0 million, a hypothetical 25 basis point change (up or down) in the one-month SOFR would result in an approximate $1 million change to our annual interest expense as of August 31, 2025.
Refer to Part II, Item 8. Note 11, Debt in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for more information on our swap agreements and outstanding borrowings.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements Page
Management’s Statement of Responsibility for Financial Statements 50
Management’s Report on Internal Control Over Financial Reporting 50
Consolidated Financial Statements:
Notes to the Consolidated Financial Statements 62
Financial Statement Schedule:
Schedule II – Valuation and Qualifying Accounts 97
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Management’s Statement of Responsibility for Financial Statements
Our management prepares and is responsible for the fairness, integrity and objectivity of our Consolidated Financial Statements. The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and include amounts based on our management’s estimates and judgments. All financial information in this Report on Form 10-K has been presented on a basis consistent with the information included in the accompanying financial statements.
Our policies and practices reflect corporate governance initiatives that are compliant with the listing requirements of the New York Stock Exchange, the NASDAQ Stock Market and the corporate governance requirements of the Sarbanes-Oxley Act of 2002. Our management, with oversight by our Board of Directors, has established and maintains a strong ethical climate so that our affairs are conducted to the highest standards of personal and corporate conduct.
We maintain accounting systems, including internal accounting controls, designed to provide reasonable assurance of the reliability of financial records and the protection of assets. The concept of reasonable assurance is based on recognition that the cost of a system should not exceed the related benefits. The effectiveness of those systems depends primarily upon the careful selection of financial and other managers, clear delegation of authority and assignment of accountability, inculcation of high business ethics and conflict-of-interest standards, policies and procedures for coordinating the management of corporate resources, and the leadership and commitment of top management. In compliance with the Sarbanes-Oxley Act of 2002, we assessed our internal control over financial reporting as of August 31, 2025 and issued a report (see below).
Management’s Report on Internal Control Over Financial Reporting
As previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2024, we had identified a material weakness in the design and operation of information technology (“IT”) general controls that support our revenues, accounts receivable, and deferred revenues processes which, in the aggregate, gave rise to a material weakness in internal control over financial reporting, which we are in the process of remediating.
For fiscal 2025, our management (with the participation of the Chief Executive Officer and Chief Financial Officer) conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of August 31, 2025, as a result of the material weakness in internal control over financial reporting described further below, which represents a continuation of a sub-set of the control deficiencies which gave rise to the initial material weakness previously identified. However, giving full consideration to the material weakness, the control deficiencies did not result in any identified misstatements, and the Company's management has concluded that our Consolidated Financial Statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with GAAP.
In accordance with the guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their first assessment of internal control over financial reporting following the date of acquisition. Based on those guidelines, our management's assessment of the effectiveness of our internal control over financial reporting excluded Platform Group Limited ("Irwin") and Liquid Holdings, LLC ("LiquidityBook"), which we acquired in the first quarter and second quarter of fiscal 2025, respectively. Excluding goodwill and intangible assets, these acquisitions represented a combined 2% of our Total assets as of August 31, 2025 and 1% of our consolidated Revenues for fiscal year 2025. Refer to Note 5, Acquisitions, for additional information on these acquisitions.
Inherent Limitations of Internal Controls over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for FactSet. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Management’s Report on Internal Control Over Financial Reporting
While we have made significant progress remediating the control deficiencies identified during our year ended August 31, 2024, we continue to have certain deficiencies related to the IT general controls that support our revenues, accounts receivable, and deferred revenues processes which, in the aggregate, rise to a material weakness in internal control over financial reporting. The deficiencies related to program change management and user access in connection with segregation of duties and restriction to appropriate users. As a result, the automated controls and IT dependent manual business process controls that rely upon information from the affected financial applications were also deemed not effective. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.
While we have concluded that these control deficiencies did not result in any material misstatements in our Consolidated Financial Statements or disclosures in any of the fiscal years ended August 31, 2025, 2024 or 2023, they were not remediated as of August 31, 2025, and thus created a reasonable possibility that they could result in a material misstatement to the Consolidated Financial Statements that would not be prevented or detected on a timely basis. Accordingly, we determined that these control deficiencies constituted a material weakness.
As a result of the identification of the material weakness, we performed further analysis and completed additional procedures intended to ensure our consolidated financial statements for the years ended August 31, 2025, 2024, and 2023 fairly present in all material respects the financial condition, results of operations and cash flows of the Company and have been prepared in accordance with GAAP.Based on these procedures and analysis, and notwithstanding the material weakness in our internal control over financial reporting, our management has concluded that our Consolidated Financial Statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with GAAP.
Ernst & Young LLP (PCAOB ID: 42), an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting and has issued an adverse opinion on the effectiveness of our internal control over financial reporting as stated in their report on the subsequent page.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of FactSet Research Systems Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of FactSet Research Systems Inc. (the Company) as of August 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended August 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended August 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of August 31, 2025 based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated October 22, 2025 expressed an adverse opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Measurement of income tax provision
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Valuation of Acquired Software Technology
/s/Ernst & Young LLP
We have served as the Company’s auditor since 2013.
Stamford, Connecticut
October 22, 2025
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of FactSet Research Systems Inc.
Opinion on Internal Control Over Financial Reporting
We have audited FactSet Research Systems Inc.’s internal control over financial reporting as of August 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, FactSet Research Systems Inc. (the Company) has not maintained effective internal control over financial reporting as of August 31, 2025, based on the COSO criteria.
As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Liquid Holdings, LLC and Platform Group Limited, which are included in the 2025 consolidated financial statements of the Company and which in aggregate, when excluding goodwill and intangible assets, constituted 2% of total assets as of August 31, 2025 and 1% of total revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Liquid Holdings, LLC and Platform Group Limited.