FDS 10-Q: Smart Summary

• Business description: FactSet Research Systems Inc. is a global financial digital platform and enterprise solutions provider; as of February 28, 2026, it had more than 9,000 clients comprised of over 241,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, hedge funds, corporate users, and private equity and venture capital professionals.
• Revenue model: Revenues are primarily derived from subscriptions to multi-asset class data and solutions; products and services include workstations, portfolio analytics, enterprise data solutions, and managed services supporting data, performance, risk and reporting workflows.
• Segments and firm types: The Company operates through 3 reportable segments — Americas, EMEA, and Asia Pacific — and within each segment offers data, products, and analytical applications by firm type: Institutional Buyside, Dealmakers, Wealth, and Market Infrastructure; in fiscal 2026, the segment formerly named 'Partnerships and CGS' was renamed 'Market Infrastructure'.
• CGS business: The CUSIP Global Services (CGS) business supports security master files relied on by the investment industry for critical front, middle and back-office functions.

• Reclassifications: Deferred revenues, non-current were reclassified out of Other liabilities into a separate line on the Consolidated Balance Sheets, and deferred acquisition consideration was broken out from Other financing activities as a separate component of Cash Flows from Financing Activities; both changes were conformed to prior-period comparative figures.
• Accounts receivable concentration: As of February 28, 2026, the accounts receivable reserve was $12.3M; no single client represented more than 3.5% of total revenues for the six months ended February 28, 2026.
• Data and cloud provider concentration: One data supplier represented more than 10% of total data costs for the six months ended February 28, 2026; one cloud supplier provided the majority of cloud computing support for the same period.
• Pending pronouncements: ASU 2025-06 (internal-use software, effective fiscal 2029) is under assessment for impact; ASU 2024-03 (expense disaggregation disclosures, effective annual fiscal 2028 / interim fiscal 2029) is not expected to have a material impact on financial statements but is under assessment for disclosure impact; ASU 2023-09 (income tax disclosures, effective annual fiscal 2026) will result in additional disclosures with no financial statement impact.

Revenue model: The company derives most revenues from the 'Hosted Platform,' a subscription-based service providing client access to workstations, portfolio analytics, and enterprise solutions, and also from the 'Identifier Platform' (CGS platform), a subscription-based service for security identifiers and related descriptive data. Recognition method: The majority of contracts represent a single performance obligation covering a series of distinct products and services recognized using an output time-based measure of progress; revenue is recognized under the 'as invoiced' practical expedient because the consideration the company has the right to invoice corresponds directly with the value of performance to date. Remaining obligations: The majority of client contracts have a duration of one year, or the amount the company is entitled to receive corresponds directly with the value of performance obligations completed to date; therefore, the company does not disclose the value of remaining unsatisfied performance obligations.

Contingent liabilities (Level 3): The sole Level 3 liabilities are contingent liabilities arising from business acquisitions, valued using a scenario-based method with unobservable inputs (probability of milestone achievement, expected payment timing, and discount rate); the balance declined from $24.1M as of August 31, 2025 to $13.1M as of February 28, 2026, with specific references to the LiquidityBook and Irwin acquisitions.

Derivative instruments: Foreign exchange forward contracts (and, where applicable, an interest rate swap) are classified as Level 2; net derivative position shifted from a net liability of $808,000 asset-side and $808,000 liability-side as of August 31, 2025, to a $476,000 asset and $1.1M liability as of February 28, 2026.

Debt fair value (disclosure only): The 2027 Notes and 2032 Notes (each $500M principal, Level 1) carried estimated fair values of $493.6M and $458.2M respectively as of February 28, 2026; the 2025 Term Facility ($375M principal, Level 3) had an estimated fair value of $374M; total estimated fair value of $1.3B compares to a net carrying value of $1.4B after unamortized discounts and issuance costs of ($5.8M).

No level transfers: There were no transfers between levels of the fair value hierarchy during the six months ended February 28, 2026 or the fiscal year ended August 31, 2025.

• FactSet acquired LiquidityBook (completed February 7, 2025): Purchase price of $243.2M, net of cash acquired and inclusive of working capital adjustments, including contingent consideration of $11.9M (acquisition date fair value of potential future payments contingent on specified milestones); LiquidityBook provides cloud-native trading solutions to hedge fund, asset and wealth management, outsourced trading, and sell-side middle office clients, operating a proprietary FIX network with connectivity to over 200 brokers and order routing to more than 1,600 destinations across 80 markets globally; purchase accounting was finalized during the second quarter of fiscal 2026 with no material changes to the preliminary allocation; goodwill of $164.8M is allocated across the Americas, EMEA and Asia Pacific segments and is deductible for income tax purposes.
• FactSet acquired Irwin (completed November 5, 2024): Purchase price of $120.2M, net of cash acquired and inclusive of working capital adjustments, including contingent consideration of $9.6M (acquisition date fair value of potential future payments contingent on specified milestones); Irwin is a leading investor relations and capital markets platform for public companies and their advisors, and the acquisition expands FactSet's ability to address holistic workflow needs of investor relations professionals; purchase accounting was finalized during the third quarter of fiscal 2025 with no material changes to the preliminary allocation; goodwill of $91.4M is allocated across the Americas and EMEA segments and is not deductible for income tax purposes.

• Impairment testing: Goodwill is tested annually in the fourth quarter using a qualitative analysis; the fiscal 2025 test concluded no impairment, and no events or circumstances were identified during the six months ended February 28, 2026 that would indicate impairment is more likely than not.
• Currency impact: The $2.5M net increase from foreign currency translations was driven by $543,000 in Americas and $2.1M in EMEA, partially offset by ($126,000 in Asia Pacific.

• Amortization method and useful lives: Intangible assets are amortized straight-line; the weighted average useful life as of February 28, 2026 was 30.4 years, driven heavily by the ABA business process intangible with a 36-year life. No material impairment and no material change to estimated remaining useful lives was identified during the six months ended February 28, 2026 and February 28, 2025; no residual values are assigned.
• Amortization expense: Amortization expense included in Cost of services was $37.2M for the three months ended February 28, 2026 (vs. $32.6M prior year) and $75M for the six months ended February 28, 2026 (vs. $62.5M prior year).
• Net carrying amount: Total net intangible assets declined modestly from $1.9B as of August 31, 2025 to $1.9B as of February 28, 2026, with the ABA business process intangible representing the dominant component at $1.4B net.
• Future amortization: Estimated amortization for the remaining six months of fiscal 2026 is $74.1M; annual amounts range from $129.4M in fiscal 2027 down to $74.4M in fiscal 2030, with $1.4B expected thereafter.

• Effective tax rate — three months: The effective tax rate was 17.4% for the three months ended February 28, 2026 vs. 15.9% for the three months ended February 28, 2025; the increase was primarily due to the limitation on the deductibility of executive compensation and lower excess tax benefits from stock-based compensation, partially offset by a favorable resolution of uncertain tax positions in the U.S.
• Effective tax rate — six months: The effective tax rate was 18.7% for the six months ended February 28, 2026 vs. 16.2% for the six months ended February 28, 2025; the increase was primarily due to a stock-based compensation tax shortfall for the six months ended February 28, 2026, compared to an excess tax benefit for the prior year period.
• Below-statutory-rate drivers: For all periods presented, the effective tax rate was lower than the U.S. corporate income tax rate primarily due to the U.S. tax impact of foreign earnings, R&D tax credits, and a foreign derived intangible income (FDII) tax deduction, partially offset by state income taxes.
• Legislative developments: Management determined that Pillar Two would not have a material impact on the Consolidated Financial Statements or effective tax rate; the One Big Beautiful Bill Act, signed July 4, 2025, also did not have a material impact on the Consolidated Financial Statements as of and for the three and six months ended February 28, 2026.

• Balance sheet footprint: As of February 28, 2026, lease ROU assets, net were $120.5M and combined Current and Long-term lease liabilities were $184.4M, with remaining lease terms ranging from less than one year to just over 10 years.
• Lease costs: Operating lease costs were $8.2M and $16.2M for the three and six months ended February 28, 2026, respectively (vs. $7.6M and $15.2M in the prior-year periods); variable lease costs were $4.4M and $9.2M for the same periods (vs. $4.8M and $9.7M).
• Lease metrics: Weighted average remaining lease term was 6.3 years and weighted average discount rate (IBR) was 4.9% as of February 28, 2026, compared to 6.1 years and 4.7% as of August 31, 2025.
• Cash flow activity: Cash paid for lease liabilities was $19.9M for the six months ended February 28, 2026; ROU assets obtained in exchange for new lease liabilities were $17.1M (vs. $4.2M in the prior-year period), with no reductions to ROU assets from early-termination reassessments (vs. ($5.5M) in the prior-year period).

• Debt structure: As of February 28, 2026, total long-term debt was $1.4B, comprising the 2025 Term Facility ($375M, maturing April 8, 2028), 2027 Notes ($500M at 2.900%, maturing March 1, 2027), and 2032 Notes ($500M at 3.450%, maturing March 1, 2032), net of $5.8M in unamortized discounts and debt issuance costs.
• 2025 Credit Agreement: Entered April 8, 2025; original 2025 Term Facility was $500M with scheduled quarterly principal payments of 1.25% of original principal beginning August 31, 2025 — all scheduled payments through maturity have been satisfied, reducing the outstanding balance to $375M as of February 28, 2026; the $1B 2025 Revolving Facility (maturing April 8, 2030) had no outstanding borrowings as of February 28, 2026; interest on the 2025 Credit Facilities accrued at one-month Term SOFR plus 0.975% (0.875% margin plus 0.1% credit spread adjustment); commitment fee on the unused revolving facility was 0.1%; debt issuance costs related to the 2025 Credit Facilities were $3.4M.
• Financial covenant: The 2025 Credit Agreement requires 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); the company was in compliance with all covenants as of February 28, 2026.
• Interest rate swaps: The 2025 Swap Agreement, entered April 24, 2025 with an initial notional of $200M, hedged floating SOFR debt at a fixed rate of 4.086%, with the notional declining $50M quarterly beginning May 31, 2025, and matured on February 28, 2026; interest expense on outstanding debt (net of swap effects and inclusive of amortization of issuance costs and discounts) was $13M for the three months ended February 28, 2026 vs. $13.9M in the prior-year period, and $26.4M for the six months ended February 28, 2026 vs. $28.3M in the prior-year period.

Commitments

• Purchase obligations with suppliers and vendors (~$352M as of August 31, 2025): Total purchase obligations primarily related to hosting services and data acquisition; a multi-year contract renewal in Q2 fiscal 2026 added ~$62.5M in new purchase commitments.
• Letters of credit ($700,000 as of February 28, 2026): Standby letters of credit outstanding; 2025 Revolving Facility permits up to $100M in letters of credit, none drawn since inception.

Legal Proceedings

• Sales Tax Dispute — Commonwealth of Massachusetts (resolved November 26, 2024): Assessment notices for sales taxes, interest, and penalties covering January 1, 2006 through December 31, 2023; settled via agreement with total charges and cash payments of approximately $66.2M.

• Share repurchase program: The Board authorized up to $400M on June 17, 2025 (effective September 1, 2025) and an additional $600M on December 16, 2025 (available immediately, no expiration date); the December authorization also removed the expiration date from the June authorization. As of February 28, 2026, $697.1M remained available. The program has no defined number of shares or specified timeframe.
• Buyback activity: Under the repurchase program, the company bought back 651,750 shares for $163M in Q2 FY2026 (vs. 136,714 shares for $64.4M in Q2 FY2025) and 1,129,850 shares for $302.9M for the six months ended February 28, 2026 (vs. 241,189 shares for $113.1M in the prior-year period). Tax withholding repurchases were 981 shares / $263,000 (Q2 FY2026) and 22,355 shares / $6M (six months FY2026).
• Excise tax: The company incurred a 1% excise tax on repurchases under the Inflation Reduction Act of 2022 of $1.5M and $500,000 for the three months ended February 28, 2026 and 2025, respectively, and $2.8M and $1.3M for the six months ended February 28, 2026 and 2025, respectively.
• Dividends: The Board declared $1.10 per share for each of Q1 and Q2 FY2026, totaling $41M (paid December 18, 2025) and $40.3M (paid March 19, 2026), respectively; comparable Q1 and Q2 FY2025 dividends were $1.04 per share ($39.6M and $39.5M).
• AOCL: Total Accumulated other comprehensive loss widened to ($69.7M) as of February 28, 2026 from ($63.7M) as of August 31, 2025, driven primarily by foreign currency translation adjustments of ($63.1M) and post-employment benefit obligations of ($6.2M) (vs. $0 at August 31, 2025), partially offset by a shift in cash flow hedge unrealized gains/losses from $2.1M to ($385,000).

Antidilutive / unmet-condition exclusions: Stock options and stock options with performance conditions excluded from Diluted EPS totaled 1,603 thousand for the three months ended February 28, 2026 (vs. 670 thousand in the prior-year quarter) and 1,504 thousand for the six months ended February 28, 2026 (vs. 695 thousand); restricted stock units and performance share units excluded totaled 262 thousand and 263 thousand for the same respective current-year periods (vs. 93 thousand and 96 thousand).

• Plan changes: Shareholders approved the FactSet Research Systems, Inc. 2025 Omnibus Incentive Plan (the 'Omnibus Plan') on December 18, 2025, replacing both prior stock option and award plans; separately, on September 1, 2025, the 2025 Employee Stock Purchase Plan replaced the 2008 ESPP. The Omnibus Plan authorized an additional 1.8 million shares, leaving 4.1 million shares available for future awards as of February 28, 2026.
• Compensation expense: Stock-based compensation expense was $20.9M for the three months ended February 28, 2026 (vs. $16.5M in the prior-year period) and $39.3M for the six months ended February 28, 2026 (vs. $30.1M); no costs were capitalized in any period presented. As of February 28, 2026, $188.2M of total unrecognized stock-based compensation expense related to non-vested awards is expected to be recognized over a remaining weighted average vesting period of 2.9 years.
• Stock option grants: 511,713 total stock option awards were granted in the six months ended February 28, 2026, comprising 213,811 employee stock options (annual grant on November 3, 2025; weighted average exercise price $264.57, fair value $75.34; vest 25% annually over four years) and 297,902 CEO PSOs (granted September 22, 2025 per his May 28, 2025 employment agreement; exercise price $295.63, fair value $73.85; vest upon achieving a 30-day trailing VWAP at or above 150% of grant-date VWAP within five years, not exercisable before the third anniversary, expire ten years from grant date).
• Restricted Stock Awards: 303,276 total Restricted Stock Awards were granted in the six months ended February 28, 2026, including 237,559 RSUs (annual grant of 169,049 on November 3, 2025 plus a one-time CEO grant of 58,332 on September 22, 2025, each vesting 25% annually over four years; weighted average grant date fair value $260.77) and 65,717 PSUs (annual grant of 43,281 on November 3, 2025 plus CEO grant of 22,436 on October 1, 2025; weighted average grant date fair value $258.46; each cliff vest on the third anniversary of grant with achievement range from 0% to 200%).

• Segment structure: The company has 3 reportable segments — Americas, EMEA, and Asia Pacific — managed by the CEO as CODM. Segment revenues reflect sales based on the geographic region where the sale originated.
• Expense allocation policy: Each segment records its own operating expenses, except costs associated with data centers, third-party data, and corporate headquarters charges, which are recorded entirely by the Americas segment and not allocated to EMEA or Asia Pacific. Global centers of excellence (COEs) expenses, primarily from India and the Philippines, are allocated to each segment based on respective percentage of revenues.
• Operating expenses definition: Operating expenses consist of Cost of services and SG&A costs. Capital expenditures include purchases of PPE and capitalized internal-use software.
• Intercompany eliminations: Intercompany revenue and expense amounts have been eliminated within each segment to reflect the basis management uses internally for evaluating segment performance.

• Business description: FactSet is a global financial digital platform and enterprise solutions provider; as of February 28, 2026, it had more than 9,000 clients comprised of over 241,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, hedge funds, corporate users, and private equity and venture capital professionals.
• Revenue model: Revenues are primarily derived from subscriptions to multi-asset class data and solutions; products and services include workstations, portfolio analytics, enterprise data solutions, and managed services supporting data, performance, risk and reporting workflows.
• Segments and firm types: The Company operates through 3 reportable segments — Americas, EMEA, and Asia Pacific — each offering data, products, and analytical applications across 4 firm types: Institutional Buyside, Dealmakers, Wealth, and Market Infrastructure (renamed from "Partnerships and CGS" in fiscal 2026).
• Market Infrastructure / CGS: The Market Infrastructure firm type includes CGS, the exclusive issuer of CUSIP and CINS identifiers globally, and focuses on partnerships delivering solutions to firms in the financial services ecosystem including data, analytics, and technology platform providers.

• Geographic segments: Growth strategy is organized around 3 segments — Americas, EMEA, and Asia Pacific — to manage resources, target solutions, and interact with clients.
• Data expansion: Investment focus includes scaling a data ecosystem spanning industry, proprietary, and third-party data (granular vertical data, real-time market data, fund data, and sustainable finance), with expanded cloud delivery to advance positioning as an enterprise data provider.
• Workflow integration: Strategy targets deeper buy-side front office penetration via portfolio performance, analytics, and risk management, plus expansion into advisor prospecting and digital reporting workflows, and next-generation automation in research, financial modeling, and pitch creation.
• AI strategy: FactSet describes its AI approach as "pragmatic, open, and flexible," emphasizing trusted high-quality data, secure model integration, and domain expertise to deliver embedded AI workflow solutions for research analysts, bankers, portfolio managers, wealth advisors, and engineering teams.

• Revenue growth: Revenues in the second quarter of fiscal 2026 were $611M, an increase of 7.1% from the comparable prior year period, driven by a 6.8% increase in organic revenues and a net 0.3% contribution from foreign currency exchange rate fluctuations, with growth across all segments primarily in the Americas and led by workstations, data solutions, and portfolio management and trading solutions.
• Organic ASV: As of February 28, 2026, Organic ASV totaled $2.4B, an increase of 6.7% over the prior year, with increases across all segments (majority in the Americas) driven mainly by data solutions and workstations.
• Margins and earnings: Operating margin was 30.3% for the second quarter of fiscal 2026, down from 32.5% in the prior year period, primarily due to higher employee compensation costs; net income decreased 8.1% to $133.1M, and Diluted EPS declined 4.5% to $3.59, both driven by higher operating expenses and an impairment charge within Other assets, with the Diluted EPS decline partially offset by lower diluted weighted average common shares outstanding.
• Capital returns and headcount: The company returned $204M to stockholders via share repurchases and dividends during the three months ended February 28, 2026; employee headcount was 12,840 as of February 28, 2026, up 1.9% year-over-year, with net headcount growth of 2.3% in Asia Pacific, 1.1% in the Americas, and 1.0% in EMEA; client count was 9,101 and user count was 241,352.

• Organic ASV level: As of February 28, 2026, ASV was $2.5B, reduced by a $1.1M impact from foreign currency movements to yield Organic ASV of $2.4B, with an organic ASV annual growth rate of 6.7%.
• Segment and driver breakdown: Organic ASV increased in all segments, with the majority of the increase in the Americas, primarily driven by data solutions and workstations, sourced from higher net sales to existing clients and, to a lesser extent, sales to new clients.

• Americas growth: Americas ASV was $1.6B as of February 28, 2026 (66% of total ASV), up from $1.5B as of February 28, 2025; Americas Organic ASV of $1.6B grew 7.0% year-over-year, primarily driven by workstations and data solutions.
• EMEA growth: EMEA ASV was $595.2M as of February 28, 2026 (24% of total ASV), up from $571.3M as of February 28, 2025; EMEA Organic ASV of $594.2M grew 4.3% year-over-year, mainly from data solutions and workstations.
• Asia Pacific growth: Asia Pacific ASV was $249.1M as of February 28, 2026 (10% of total ASV), up from $233.7M as of February 28, 2025; Asia Pacific Organic ASV of $249.1M grew 10.0% year-over-year, primarily driven by data solutions, workstations, and middle office solutions.

• Client and user growth: Total clients reached 9,101 as of February 28, 2026, up 5.3% from 8,645 a year earlier, driven mainly by corporate and wealth management clients; total users grew 10.1% to 241,352 from 219,141, primarily due to wealth management users.
• Retention metrics: Annual ASV retention remained greater than 95% of ASV as of both February 28, 2026 and February 28, 2025; when expressed as a percentage of clients, annual retention was 91% at both period-end dates.

• Headcount growth: Net employee headcount increased 1.9% to 12,840 as of February 28, 2026, from 12,598 as of February 28, 2025, primarily driven by continued investment in centers of excellence (COEs) through increased employees based in India.
• Geographic distribution: As of February 28, 2026, 8,883 employees were in Asia Pacific (up 2.3% YoY), 2,501 in the Americas (up 1.1%), and 1,456 in EMEA (up 1.0%); approximately 68% of all employees are located in COEs.

• Revenue growth: Revenues grew 7.1%, driven by a 6.8% increase in organic revenues, which totaled $606.2M for the three months ended February 28, 2026, with a net increase of 0.3% from foreign currency exchange rate fluctuations.
• Geographic and product drivers: Revenues increased in all geographic segments, primarily in the Americas, with growth driven by workstations, data solutions, and portfolio management and trading solutions.

• Revenue growth drivers: Total revenues grew 7.0% for the six months ended February 28, 2026, driven by a 6.4% increase in organic revenues (totaling $1.2B), a 0.3% increase from acquisition revenues net of a decrease from a business disposition at the end of the prior fiscal year, and a 0.3% net increase from foreign currency exchange rate fluctuations.
• Segment and product mix: Revenues increased in all segments, primarily in the Americas, with growth mainly from workstations, data solutions, and portfolio management and trading solutions.

• Americas mix: Americas was the largest segment in both periods, comprising 65.4% of revenues in the three months ended February 28, 2026 (vs. 64.8% in the prior-year quarter) and 65.3% for the six months ended February 28, 2026 (vs. 64.7%), growing 8.1% and 8.0% respectively.
• EMEA mix: EMEA contributed 24.4% of revenues in the three months ended February 28, 2026 (vs. 25.1% prior year) and 24.5% for the six months ended February 28, 2026 (vs. 25.2%), with 4.0% growth in both periods — the slowest of the three segments.
• Asia Pacific mix: Asia Pacific represented 10.2% of revenues in both the three and six months ended February 28, 2026 (vs. 10.1% in both prior-year periods), growing 8.0% and 7.7% respectively.
• Consolidated growth: Total consolidated revenues grew 7.1% to $611M for the three months ended February 28, 2026, and 7.0% to $1.2B for the six months ended February 28, 2026.

• Revenue growth: Americas revenues grew 8.1%, driven by a 7.4% increase in organic revenues and a 0.7% increase from acquisition revenues, net of a decrease from the disposition of a business at the end of the prior fiscal year.
• Growth drivers: The increase in revenues was driven by workstations, data solutions, and portfolio management and trading solutions.

• Revenue growth: EMEA revenues grew 4.0%, driven by a 4.0% increase in organic revenues and a 1.0% net increase from foreign currency exchange rate fluctuations, partially offset by a 1.0% decrease from the disposition of a business at the end of the prior fiscal year, net of acquisition revenues.
• Growth drivers: The increase in revenues was mainly from data solutions and workstations, partially offset by a decrease in revenues due to the disposition.

• Revenue growth: Asia Pacific revenues grew 8.0%, driven by a 9.7% increase in organic revenues, partially offset by a 1.6% decrease from the disposition of a business at the end of the prior fiscal year (net of acquisition revenues) and a 0.1% net decrease from foreign currency exchange rate fluctuations.
• Growth drivers: The increase in revenues was driven by data solutions, workstations, and middle office solutions, partially offset by a decrease in revenues due to the disposition.

• Revenue growth drivers: Americas revenues grew 8.0%, driven by a 6.9% increase in organic revenues and a 1.1% increase from acquisition revenues, net of a decrease from the disposition of a business at the end of the prior fiscal year.
• Product mix: The increase in revenues was driven by workstations, data solutions, and portfolio management and trading solutions.

• Revenue growth: EMEA revenues grew 4.0%, driven by a 4.0% increase in organic revenues and a 0.8% net increase from foreign currency exchange rate fluctuations, partially offset by a 0.8% decrease from the disposition of a business at the end of the prior fiscal year, net of acquisition revenues.
• Growth drivers: The increase in revenues was mainly from data solutions and workstations, partially offset by a decrease in revenues due to the disposition.

• Revenue growth: Asia Pacific revenues grew 7.7%, driven by a 9.0% increase in organic revenues and a 0.1% net increase from foreign currency exchange rate fluctuations, partially offset by a 1.4% decrease from the disposition of a business at the end of the prior fiscal year, net of acquisition revenues.
• Growth drivers: The increase in revenues was driven by data solutions and workstations, partially offset by a decrease in revenues due to the disposition.

• Cost of services composition: Mainly employee compensation (content collection, consulting, product development, software and systems engineering personnel), plus data costs, technology-related expenses, amortization of intangible assets, royalty fees, telecommunication costs, and computer depreciation.
• SG&A composition: Primarily employee compensation (sales, marketing, finance, legal, human resources, and administrative services personnel), plus occupancy costs, professional fees, depreciation of furniture and fixtures, amortization of leasehold improvements, travel and entertainment, marketing costs, bad debt expense, impact from foreign currency forward contracts, and asset impairments.
• Operating margin compression: Operating margin contracted to 30.3% in the three months ended February 28, 2026 from 32.5% in the prior-year period, and to 30.9% for the six months ended February 28, 2026 from 33.1%, as total operating expense growth of 10.6% (three months) and 10.4% (six months) outpaced revenue growth, leaving operating income nearly flat at $185M and $377M, respectively.

• Overall cost rate: Cost of services as a % of revenues was 48.6% for the three months ended February 28, 2026, an increase of 130 basis points compared with the same period a year ago, driven by higher employee compensation costs, technology-related expenses, and amortization of intangible assets.
• Employee compensation: Increased by 50 basis points as a % of revenues, primarily due to higher annual base salaries from annual merit increases and higher benefit costs related to the India Labor Codes Reform implemented by the Government of India effective November 21, 2025.
• Technology-related expenses: Increased by 40 basis points as a % of revenues, primarily driven by higher spend in cloud-based hosting services.
• Amortization of intangibles: Increased by 40 basis points as a % of revenues, mainly due to higher amortization from capitalized internal-use software development costs.

• Cost of services ratio: Cost of services as a % of revenues was 48.0% for the six months ended February 28, 2026, an increase of 160 basis points compared with the same period a year ago, primarily driven by higher amortization of intangible assets and technology-related expenses.
• Amortization of intangibles: Amortization of intangible assets increased by 70 basis points as a % of revenues, mainly due to higher amortization from capitalized internal-use software development costs.
• Technology-related expenses: Technology-related expenses increased by 60 basis points as a % of revenues, primarily driven by higher spend in cloud-based hosting services.
• Absolute cost drivers: The absolute increase in Cost of services was primarily due to higher employee compensation costs and, to a lesser extent, an increase in amortization of intangible assets and technology-related expenses.

• Overall SG&A trend: SG&A as a % of revenues was 21.2% for the three months ended February 28, 2026, an increase of 90 basis points year over year, with the net change driven by higher employee compensation costs partially offset by lower professional fees and a benefit from foreign currency forward contract settlements.
• Employee compensation: Employee compensation costs increased 160 basis points as a % of revenues, driven by higher variable compensation (including a higher bonus accrual and recognition of one-time cash awards granted to the CEO under his employment agreement), annual merit-driven base salary increases, and higher stock-based compensation expense (including equity awards granted to the CEO recognized over their service period).
• Professional fees: Professional fees decreased 60 basis points as a % of revenues, mainly due to acquisition-related costs recorded in the prior year period that did not recur.
• FX forwards: SG&A decreased 40 basis points as a % of revenues due to a benefit from the net settlement of foreign currency forward contracts.

• SG&A as % of revenue: SG&A was 21.1% of revenues for the six months ended February 28, 2026, an increase of 50 basis points compared with the same period a year ago.
• Employee compensation: Employee compensation costs increased by 140 basis points as a percentage of revenues, driven by higher variable compensation costs, stock-based compensation expense, and annual base salaries; variable compensation and stock-based compensation expense rose mainly due to recognition of one-time cash awards and equity awards granted to the CEO pursuant to his employment agreement, with variable compensation also reflecting a higher bonus accrual, and base salaries reflecting annual merit increases.
• Professional fees: Professional fees decreased by 50 basis points as a percentage of revenues, mainly due to acquisition-related costs recorded in the prior year period.
• FX contracts and Sales Tax Dispute: SG&A decreased by 50 basis points as a percentage of revenues due to a benefit from the net settlement of foreign currency forward contracts and charges related to the Sales Tax Dispute recorded in the prior year period.

• Operating income: Decreased 0.3% to $185M for the three months ended February 28, 2026, compared with $185.5M in the prior year period, driven primarily by higher employee compensation costs and an increase in other expenses included in Cost of services, partially offset by revenue growth.
• Operating margin: Contracted to 30.3% for the three months ended February 28, 2026, from 32.5% in the prior year period, with the decline driven primarily by higher employee compensation costs, partially offset by revenue growth and a decrease in professional fees.

• Operating income: Increased 0.1% to $377M for the six months ended February 28, 2026, compared with $376.8M in the prior year period, driven by revenue growth partially offset by higher employee compensation costs, amortization of intangible assets, and technology-related expenses.
• Operating margin: Decreased to 30.9% for the six months ended February 28, 2026, compared with 33.1% in the prior year period, primarily due to higher employee compensation costs, amortization of intangible assets, and technology-related expenses, partially offset by revenue growth.

• Segment trends (three months): Americas operating income rose 1.5% to $74.2M, Asia Pacific rose 6.5% to $44.5M, while EMEA declined 6.1% to $66.2M; total operating income was essentially flat at $185M vs. $185.5M (down 0.3%).
• Segment trends (six months): Asia Pacific led growth at +9.2% to $89.9M; Americas declined 1.4% to $152.7M and EMEA declined 3.7% to $134.4M; total six-month operating income was nearly unchanged at $377M vs. $376.8M (+0.1%).

• Operating income drivers: Americas operating income increased primarily due to 8.1% revenue growth, partially offset by higher employee compensation costs and, to a lesser extent, increases in technology-related expenses and amortization of intangible assets.
• Employee compensation: Higher variable compensation costs (driven by a higher bonus accrual), stock-based compensation expense, and annual base salary increases from annual merit increases all contributed; variable compensation and stock-based compensation also rose due to recognition of one-time cash awards and equity awards granted to the CEO pursuant to his employment agreement.
• Technology and amortization: Technology-related expenses increased mainly due to higher spend in cloud-based hosting services; amortization of intangible assets increased primarily due to higher amortization from capitalized internal-use software development costs.

• Operating income: EMEA operating income decreased primarily due to higher employee compensation costs, partially offset by revenue growth of 4.0%.
• Compensation drivers: The increase in employee compensation costs was driven mainly by higher annual base salaries, primarily from annual merit increases.

• Operating income drivers: Asia Pacific operating income increased mainly due to revenue growth of 8.0%, partially offset by higher employee compensation costs.
• Compensation cost drivers: Higher employee compensation costs were primarily due to increased benefit costs related to the India Labor Codes Reform and higher annual base salaries driven by annual merit increases.

• Operating income drivers: Americas operating income decreased primarily due to higher employee compensation costs and, to a lesser extent, an increase in amortization of intangible assets and technology-related expenses, partially offset by revenue growth of 8.0%.
• Employee compensation: Costs rose due to higher variable compensation, stock-based compensation expense, and annual base salary increases; variable compensation and stock-based compensation increased mainly due to recognition, over their respective service periods, of one-time cash awards and equity awards granted to the CEO pursuant to his employment agreement, with variable compensation also reflecting a higher bonus accrual; base salary increases were driven by annual merit increases.
• Amortization & technology costs: Amortization of intangible assets increased mainly due to higher amortization from capitalized internal-use software development costs; technology-related expenses increased mainly due to higher spend in cloud-based hosting services.

• Operating income: EMEA operating income decreased primarily due to higher employee compensation costs, partially offset by revenue growth of 4.0%.
• Compensation drivers: Employee compensation costs increased primarily due to higher annual base salaries driven by annual merit increases.

• Revenue growth: Asia Pacific operating income increased mainly due to revenue growth of 7.7%, partially offset by higher employee compensation costs.
• Cost pressure: Employee compensation costs increased primarily due to higher annual base salaries driven by annual merit increases, and higher benefit costs related to the India Labor Codes Reform.

• Q2 effective tax rate: The effective tax rate rose to 17.4% for the three months ended February 28, 2026 from 15.9% in the prior-year period, driven primarily by the limitation on deductibility of executive compensation and lower excess tax benefits from stock-based compensation, partially offset by a favorable resolution of uncertain tax positions in the U.S.
• YTD effective tax rate: The effective tax rate for the six months ended February 28, 2026 increased to 18.7% from 16.2% in the prior-year period, primarily due to a stock-based compensation tax shortfall in the current year versus an excess tax benefit in the prior year period.
• Rate vs. U.S. statutory rate: For all periods presented, the effective tax rate was below the U.S. corporate income tax rate, attributable to the U.S. tax impact of foreign earnings, R&D tax credits, and a foreign derived intangible income (FDII) tax deduction, partially offset by state income taxes.

• Three-month drivers: Net income declined 8.1% to $133.1M and Diluted EPS fell 4.5% to $3.59 for the three months ended February 28, 2026, driven mainly by higher operating expenses and an impairment charge within Other assets, partially offset by revenue growth and lower diluted weighted average common shares outstanding (37,063 thousand vs. 38,510 thousand).
• Six-month drivers: Net income declined 3.1% to $285.6M and Diluted EPS was essentially flat at $7.65 vs. $7.66 for the six months ended February 28, 2026, with higher operating expenses and a higher provision for income taxes as the primary headwinds, partially offset by revenue growth and lower diluted weighted average common shares outstanding (37,339 thousand vs. 38,513 thousand).

• Organic revenue reconciliation: Reported revenues of $611M (three months ended February 28, 2026) and $1.2B (six months ended February 28, 2026) are adjusted for acquisition revenues of ($3.4M) and ($10.1M), disposition revenues of $0 and $0, and currency impact of ($1.5M) and ($2.4M), yielding organic revenues of $606.2M (+6.8%) and $1.2B (+6.4%) for the respective periods.
• Adjusted vs. GAAP operating income: GAAP operating income declined (0.3)% to $185M for the three months ended February 28, 2026, while adjusted operating income grew 0.7% to $214.1M; GAAP operating margin was 30.3% vs. adjusted operating margin of 35.0%, compared to 32.5% and 37.3% in the prior-year quarter.
• Key non-recurring add-backs: The largest adjustments for the three months ended February 28, 2026 include intangible asset amortization ($19.2M at the operating income level), CEO compensation costs of $3.9M related to one-time make-whole cash and equity awards, India Labor Codes Reform of $2.9M, and business disposition/acquisition costs of $2M; a $10.2M impairment of an equity investment flows through to adjusted net income.
• Adjusted EPS and EBITDA: Adjusted Diluted EPS grew 4.2% to $4.46 for the three months ended February 28, 2026 (vs. GAAP Diluted EPS of $3.59, down (4.5)%); adjusted EBITDA grew 3.8% to $233.2M vs. GAAP EBITDA of $217.9M (down (3.0)%); adjusted tax rates applied were 21.2% (Q2 2026) and 26.0% (Q2 2025), and 20.7% and 25.6% for the respective six-month periods.

• Cash position: As of February 28, 2026, cash and cash equivalents were $268.3M and restricted cash was $9.1M, down from $337.7M and $14M, respectively, as of August 31, 2025.
• Geographic distribution: Of the $268.3M in cash, $115.7M was held in EMEA (largest balance in the UK), $90M in the Americas (largest balance in the U.S.), and $62.6M in Asia Pacific (largest balances in the Philippines and India).
• Liquidity adequacy: Management states that cash flows from operations, existing cash, and debt borrowings have been sufficient to fund operations and long-term growth investments; uses of cash include debt service, working capital, capital expenditures, acquisitions, investments, dividend payments, and common stock repurchases. Management believes sources of liquidity, including available capacity under the existing revolving credit facility and other financing alternatives, will provide sufficient capital for planned growth for the next 12 months and the foreseeable future.

• Facility structure: On April 8, 2025, the company entered into the 2025 Credit Agreement, borrowing $500M under a senior unsecured term loan (the "2025 Term Facility") and establishing a $1B senior unsecured revolving credit facility (the "2025 Revolving Facility"); proceeds from the term loan were used to repay the outstanding balance under the 2022 Revolving Facility.
• Revolving facility features: The 2025 Revolving Facility includes up to $100M in letters of credit, up to $100M in swingline loans, and the company may seek up to $1B in additional commitments; the 2025 Term Facility matures April 8, 2028, and the 2025 Revolving Facility matures April 8, 2030.
• Repayment and outstanding balance: The 2025 Term Facility requires quarterly principal payments of 1.25% of original principal commencing August 31, 2025, with prepayments applied in direct order of maturity; the company has satisfied all scheduled quarterly principal payments through maturity, and as of February 28, 2026, outstanding debt under the 2025 Term Facility was $375M with no borrowings under the 2025 Revolving Facility.
• Pricing and covenants: Borrowings bore interest at one-month Term SOFR plus a 0.975% spread (0.875% margin plus 0.1% credit spread adjustment), the commitment fee on the unused revolving facility was 0.1%, and the 2025 Credit Agreement requires a total leverage ratio no greater than 3.75 to 1.00 (expandable to 4.25 to 1.00 for five consecutive quarters in connection with certain material acquisitions); the company was in compliance with all covenants as of February 28, 2026.

• 2022 Credit Agreement structure: On March 1, 2022, the company borrowed $1B under a senior unsecured term loan (the "2022 Term Facility") and $250M of an available $500M senior unsecured revolving credit facility (the "2022 Revolving Facility"), collectively the "2022 Credit Facilities."
• Revolving facility upsized: On January 31, 2025, a joinder agreement increased commitments under the 2022 Revolving Facility by $100M, raising the total to $600M, with all other terms unchanged.
• Interest rate and termination: Borrowings bore interest at one-month Term SOFR plus a leverage-based spread and credit spread adjustment, with the total spread ranging from 0.975% to 1.1% over the term; the 2022 Credit Agreement was terminated on April 8, 2025, concurrent with entering into the 2025 Credit Agreement.

• 2027 Notes: On March 1, 2022, the company completed a public offering issuing $500M of 2.900% Senior Notes due March 1, 2027, with U.S. Bank Trust Company, National Association as trustee.
• 2032 Notes: Concurrent with the 2027 Notes, the company issued $500M of 3.450% Senior Notes due March 1, 2032; interest on both tranches is payable semiannually in arrears on March 1 and September 1 of each year.
• Redemption and change of control: The company may redeem the Senior Notes, in whole or in part, at any time at specified redemption prices plus accrued and unpaid interest; upon a change of control triggering event, the company must offer to repurchase at 101% of principal plus accrued and unpaid interest.

• 2025 Swap Agreement: On April 24, 2025, the company entered into an interest rate swap agreement with a notional amount of $200M to hedge a portion of its outstanding floating SOFR debt at a fixed rate of 4.086%; the notional amount declined by $50M on a quarterly basis beginning May 31, 2025, and the agreement matured on February 28, 2026.

• 2024 Swap Agreement: On March 1, 2024, the company entered into an interest rate swap agreement with a notional amount of $200M to hedge a portion of its outstanding floating SOFR debt at a fixed rate of 5.145%; the notional amount declined by $50M on a quarterly basis beginning May 31, 2024, and the agreement matured on February 28, 2025.

• Capital returned: $385.3M returned to stockholders via share repurchases and dividends during the six months ended February 28, 2026, compared to $192M in the six months ended February 28, 2025; over the trailing 12 months, total capital returned was $653.8M.

• Repurchase activity: During the six months ended February 28, 2026, the company repurchased 1,129,850 shares for $302.9M, compared to 241,189 shares for $113.1M in the six months ended February 28, 2025.
• Board authorizations: On June 17, 2025, the Board authorized up to $400M for repurchases on or after September 1, 2025; on December 16, 2025, the Board approved an additional $600M in repurchase authority available immediately with no expiration date, which also removed the expiration date from the June 17, 2025 authorization.
• Remaining capacity: As of February 28, 2026, $697.1M remained available under the share repurchase program, which has no defined share count or specified timeframe.

• Dividends paid: Dividends totaled $82.4M for the six months ended February 28, 2026, compared to $78.8M for the six months ended February 28, 2025.
• Future dividend policy: Future cash dividend payments are subject to final determination by the Board of Directors and will depend on earnings, capital requirements, financial condition, and other relevant factors.

• Capital expenditures: Increased 14.6% to $56.8M for the six months ended February 28, 2026, compared with $49.6M for the same period a year ago, driven by higher capitalized costs related to the development of internal-use software and an increase in leasehold improvements related to the build-out of the London office, partially offset by a decrease in purchases of network-related equipment.

• Acquisition close and price: FactSet completed the acquisition of LiquidityBook on February 7, 2025 for a purchase price of $243.2M, net of cash acquired and inclusive of working capital adjustments, with contingent consideration of $11.9M reflecting the acquisition-date fair value of potential future payments contingent on specified milestones.
• Purchase accounting: Purchase accounting for the LiquidityBook acquisition was finalized during the second quarter of fiscal 2026.
• Business description: LiquidityBook provides cloud-native trading solutions to hedge fund, asset and wealth management, outsourced trading, and sell-side middle office clients, operating a proprietary FIX network with connectivity to over 200 brokers and order routing to more than 1,600 destinations across 80 markets globally.
• Strategic rationale: The acquisition adds order management and investment book of record capabilities, enhancing FactSet's ability to serve integrated workflow needs across the portfolio life cycle.

• Acquisition close and price: FactSet completed the acquisition of Irwin on November 5, 2024, for a purchase price of $120.2M, net of cash acquired and inclusive of working capital adjustments, which included contingent consideration of $9.6M reflecting the acquisition-date fair value of potential future payments contingent upon achieving certain specified milestones.
• Purchase accounting: Purchase accounting for the Irwin acquisition was finalized during the third quarter of fiscal 2025.
• Strategic rationale: Irwin is described as a leading investor relations and capital markets platform for public companies and their advisors; the acquisition is stated to expand FactSet's ability to address the holistic workflow needs of investor relations professionals with an integrated, modern solution.

• Purchase obligations: As of August 31, 2025, total purchase obligations with suppliers and vendors were approximately $352M, primarily related to hosting services and acquisition of data, with a lesser portion attributable to third-party software providers.
• New contract commitment: During the second quarter of fiscal 2026, a multi-year contract renewal with a supplier resulted in total purchase commitments of approximately $62.5M.

• Operating cash flow, current period: For the six months ended February 28, 2026, net cash provided by operating activities was $333M, comprising net income of $285.6M, non-cash charges of $154.2M (primarily depreciation and amortization), and a net working capital cash outflow of $106.8M driven by timing of client collections and the annual variable compensation payment.
• Operating cash flow, prior period: For the six months ended February 28, 2025, net cash provided by operating activities was $260.3M, comprising net income of $294.9M, non-cash charges of $131.4M (primarily depreciation and amortization), and a net working capital cash outflow of $166M driven by payments to resolve the Sales Tax Dispute, timing of income tax and vendor payments, and timing of client collections.

• Six months ended February 28, 2026: Net cash used in investing activities was $21.9M, primarily from $56.8M of capital expenditures (mainly internal-use software development costs), partially offset by $36.1M in proceeds from the sale of certain equity investments.
• Six months ended February 28, 2025: Net cash used in investing activities was $338.1M, driven by $342.5M of acquisition-related consideration for the Irwin and LiquidityBook transactions and $49.6M of capital expenditures for internal-use software development costs, partially offset by $58.2M in proceeds from investments in mutual funds.

• Six months ended February 28, 2026: Net cash used in financing activities was $386.7M, consisting mainly of $302.9M of share repurchases and $82.4M of dividend payments.
• Six months ended February 28, 2025: Net cash used in financing activities was $45.5M, consisting mainly of $200M related to the repayment of the 2022 Credit Facilities, $113.1M of share repurchases, and $78.8M of dividend payments, partially offset by $305M of proceeds related to additional borrowings under the 2022 Revolving Facility.

• Definition: Free cash flow is defined as cash provided by operating activities less purchases of PPE and capitalized internal-use software; management views it as the cash available after capital expenditures for strategic opportunities including returning value to stockholders, acquisitions, and balance sheet strengthening.
• Year-over-year improvement: Free cash flow grew by $65.4M to $276.1M for the six months ended February 28, 2026, compared to $210.7M in the prior-year period, driven by a $72.6M increase in net cash provided by operating activities (to $333M from $260.3M), partially offset by $7.2M in higher capital expenditures.

• Currency hedging program: During the six months ended February 28, 2026 and February 28, 2025, the company maintained a series of foreign currency forward contracts to hedge a portion of projected operating expenses in British Pound Sterling, Euro, Indian Rupee, and Philippine Peso.
• Hedge maturity range: As of February 28, 2026, outstanding foreign currency forward contracts have maturity periods ranging from the third quarter of fiscal 2026 through the second quarter of fiscal 2027.