FactSet Q4 2026 earnings beat estimates on record ASV quarter

A clean beat on the adjusted numbers

FactSet's fiscal year ended on a strong quarter. For the fourth quarter of fiscal 2026, which closed August 31, the financial data provider reported revenue of $634.7 million, up 6.3% from a year earlier. Organic revenue grew 7.1%.1 Adjusted diluted earnings per share rose 11.6% to $4.52, compared with $4.05 a year earlier. The company credited higher revenue and a lower share count.1

Both figures came in above Wall Street's expectations. MarketBeat put the consensus EPS estimate at $4.35, so FactSet beat it by 17 cents. Revenue cleared the expected $629.83 million by roughly $4.9 million.7 Investing.com's numbers are slightly different. It used a revenue estimate of $629.74 million and compared it with $635.5 million, which matches FactSet's organic revenue figure rather than the $634.7 million reported under GAAP.51 Either way, the result is the same: a beat of a few percent on earnings and less than 1% on revenue. Investing.com described the beat as not unusually large but in line with the company's record of steady execution.5 That seems fair. FactSet also beat the $4.35 estimate last quarter, when it reported $4.53 in adjusted EPS for its fiscal third quarter.8

Investors responded positively but without much excitement. A market snapshot on results day showed FDS at $269.95, up 3.84%.10 Investing.com called the reaction positive but measured and said the slower outlook probably kept the stock from rising further.11

The GAAP picture is less flattering

The adjusted figures leave out a less flattering GAAP picture. Fourth-quarter GAAP net income fell 21.1% to $121.1 million, and GAAP diluted EPS dropped 15.4% to $3.41.2 GAAP operating income fell 11.7% to $156.6 million. The GAAP operating margin was 24.7%, down from 29.7% a year earlier.41

Most of the gap comes from items FactSet treats as non-recurring. Restructuring and severance charges were $26.9 million in the quarter, compared with about $0.6 million a year before. The company also recorded $4.6 million in onboarding costs tied to make-whole awards for its new CEO.1 FactSet added that the prior-year quarter had benefited from a gain on the sale of a business.1 Full-year GAAP diluted EPS was $14.57, short of the company's own latest guidance range of $14.85 to $15.35. Meanwhile, full-year adjusted EPS of $18.01 beat its adjusted range of $17.25 to $17.75.14

This split matters. FactSet's investment case has long depended on steady compounding. Fiscal 2026 marked the 30th straight year of higher adjusted diluted EPS, and the company says revenue has now grown for 47 consecutive years.14 Those streaks continued, but only after restructuring costs were stripped out. Even on an adjusted basis, profitability declined. Full-year adjusted operating margin was 34.5%, about 180 basis points below fiscal 2025. Fourth-quarter adjusted margin was 33.0%, compared with 33.8% a year earlier.35 Adjusted EBITDA for the quarter fell 14.5%.1 Overall, FactSet spent more heavily in fiscal 2026 to set up future growth, and its profits took the hit.

Subscription growth is the real story

The numbers that best support management's case are forward-looking. Organic annual subscription value (ASV), FactSet's main measure of recurring contracted revenue, grew 7.0% to $2,568.2 million. That was an increase of $168.2 million from a year earlier.24 Management said this beat the top of its guidance range. It was more than 30% above the organic ASV added in fiscal 2025 and the company's best growth rate in three years.5 The fourth quarter alone added $86 million in organic ASV, the most in any quarter in FactSet's history.3

The growth was not limited to one area. On the call, management said organic ASV growth sped up year over year in every region: 7% in the Americas, 5% in EMEA and more than 10% in Asia-Pacific.6 Investing.com reported that growth was led by institutional buy-side firms, dealmakers, wealth managers and market infrastructure clients.5 ASV retention stayed above 95%, and average renewal contract length rose about 30% in the quarter.4 Management linked that increase to a move away from seat-based licenses toward enterprise agreements.16

Artificial intelligence was a constant theme in the coverage. FactSet said the ASV it added from AI solutions in fiscal 2026 more than doubled from the year before.4 AI-related products made up a double-digit share of new ASV in the fourth quarter.5 When analysts pressed on that figure, CFO Joshua Warren said AI-related net new offerings accounted for slightly more than 10% of the $86 million generated in the quarter. Usage data from the call showed rapid adoption. More than 650 clients were using FactSet's Model Context Protocol (MCP) offering by year-end, a 40% rise during the quarter. API call volume grew sevenfold from the prior quarter.15

The AI story is easy to overstate. A roughly 10% share of new ASV is real, but it is a small portion of a business worth more than $2.5 billion. Management also said it has built no AI-driven acceleration into its fiscal 2027 forecast, citing how early its clients are in adopting the technology.14 For now, AI is helping FactSet keep and grow its client base. It is not yet a major source of growth on its own.

Guidance: slower growth, better margins

The outlook is where coverage became more cautious. FactSet expects fiscal 2027 organic ASV growth of 5.0% to 6.5%, below the 7% it just reported.1311 Revenue guidance is $2,600 million to $2,625 million, or 5% to 6% reported growth, with like-for-like growth about 100 basis points higher. Management said the difference reflects its exit from the ESG Signals attribution business, currency rates and other one-time items.1215

On profits, the guidance looks better. FactSet projects an adjusted operating margin of 34.75% to 35.25%, an improvement of 25 to 75 basis points, and adjusted diluted EPS of $19.25 to $19.65.1316 Management said fiscal 2026 margins should be the floor. It argued that one-time investments, including the move from one cloud provider to several and stronger cybersecurity, will not recur, while productivity programs and AI tools used internally start to cut costs.16

Two factors outside operations will hold earnings back. A higher assumed tax rate and higher interest costs on $500 million of 2.9% notes maturing in March 2027 together make up a headwind of about 2%. Warren estimated the cost at $0.30 to $0.40 per share.15 The effective tax rate was about 19% in fiscal 2026, compared with about 18% the year before.15 FactSet expanded its revolving credit facility from $1 billion to $1.5 billion, which was undrawn at year-end. Coverage also noted that Moody's reaffirmed the company's investment-grade rating.16

Where the coverage diverges

The sources agree on the facts but read them differently. Transcript summaries and call recaps described the quarter as clearly positive, citing record ASV, competitive wins and strong cash flow.3 Filing-focused summaries emphasized the fall in GAAP profit and the missed GAAP guidance.24 Investing.com landed between them. It saw a healthy business whose slower guidance probably limited the stock's gains.11

The most pointed question on the call came from Deutsche Bank's Faiza Alwy. She asked whether the slowdown in guidance meant fiscal 2026 had pulled contracts forward. CEO Sanoke Viswanathan said no. He credited the fourth-quarter strength to execution and described the pipeline as strong and diverse. Management also warned that enterprise-style agreements and their renewal cycles may make quarterly growth uneven, with results weighted toward the second half.15

The takeaway

The most likely explanation is that FactSet's guidance is conservative. A company coming off its biggest ASV quarter, with longer contracts and retention above 95%, has room to beat a 5% to 6.5% range. This reading assumes the pipeline is as healthy as management says. The more important test in fiscal 2027 is margins. Management has said fiscal 2026 margins are the floor and that the heavy investment phase is over. If margins improve by the promised 25 to 75 basis points, the GAAP decline of fiscal 2026 will look like a one-year transition. If restructuring charges and investment spending continue, the gap between GAAP and adjusted results will become harder for investors to ignore. FactSet's upcoming Investor Day, where it plans to lay out a multi-year framework for shareholder returns, will be the next chance to judge which outcome is more likely.16