CEO’S LETTER TO SHAREHOLDERS

Throughout fiscal 2023, FactSet continued to solidify our position as a trusted enterprise partner for our clients. Our team remained committed to innovation and to delivering purpose-built solutions and mission-critical data that empower investment professionals to work more efficiently. Our unwavering dedication to driving the investment community to achieve more and do its best work made this progress possible.

Enterprise packages drove growth with strategic wins across various workflows. We successfully expanded our presence with existing clients, attracting new logos and users, both on- and off-platform.

Our industry-leading analytics and middle office solutions played a crucial role in FactSet winning a major performance deal on the buy-side. Asset managers and asset owners increasingly rely on FactSet to handle more aspects of their portfolio lifecycle. Demand also increased for our cloud-native real-time market data services.

On the sell-side, our Deep Sector solution was pivotal in securing banking client renewals. We believe that the Deep Sector solution positions us well to gain a larger market share in the banking sector in fiscal 2024.

In addition to producing solid financial results, we achieved several significant milestones during the 2023 fiscal year. A notable accomplishment was the successful integration of CUSIP Global Services, the largest acquisition in our history, into the FactSet family. Additionally, we reduced our debt leverage to below 2.5x, allowing us to resume our share repurchase program in May 2023. As a result, we returned over $315 million to our shareholders through dividends and share repurchases during the 2023 fiscal year.

Our business has undergone a positive transformation as we have expanded our client base, diversified our product mix, and achieved sustainable growth through targeted investments fueled by our exceptional execution strategy. This year, we expanded our client base to over 7,900 and increased our user base by 6%, surpassing 189,000 users.

A Winning Strategy

Our commitment to delivering the leading open data and analytics platform resonated with our clients and drove growth. As the pace of technological change continues to accelerate, we remain committed to innovation, constantly adapting to stay ahead. We have been incorporating machine learning and artificial intelligence (AI) into our offerings since 2018, and the recent advancements in Generative AI have allowed us to further enhance our development. In the latter half of 2023, we began devoting additional resources to Generative AI projects, and we intend to invest further in this area in fiscal 2024, making it one of our top priorities.

One of our key competitive advantages is FactSet's data refinery, which provides us with an extensive suite of highly connected proprietary and third-party data. We are continually investing in new categories of data to enhance our workflow solutions. The breadth and depth of our data will enable us to ground our AI-powered products in facts and allow for auditability and verification. Clients can, and will be able to, rely on FactSet for trustworthy answers in our current and future products.

We look to reimagine our user experience through the incorporation of Generative AI to support “mile-wide discoverability” across FactSet, allowing clients to ask questions, source information, and initiate tasks. Leveraging our 45-year heritage of client-centricity and workflow understanding, we are also building AI-augmented workflows specific to client types and personas to automate time-consuming parts of client workflows and enable “mile-deep” personalization. We foresee clients being able to lean on FactSet to generate a proposal, create a pitchbook, summarize portfolio performance, and more through a conversational experience. Finally, we aim to provide API access to AI-ready data solutions that can be leveraged in any client workflow in any cloud or in conjunction with other copilots or models.

In addition to driving growth and innovation, we see significant cost savings opportunities through Generative AI projects that can enhance our operational efficiency. In fiscal 2023, we piloted AI coding initiatives to improve technologist productivity and used our agent assist bot to help respond to client queries. Furthermore, our recent acquisition of idaciti has bolstered our expertise in collecting unstructured data. As we enter fiscal 2024, we plan to build upon our strategic investments in content, Generative AI, and technology to foster deeper client relationships and drive continued growth.

A Passion for Making an Impact

Our commitment to sustainable growth extends to our clients, employees, shareholders, and communities. We recognize that our success hinges on our people, our most valuable asset. Therefore, we have continued to invest in initiatives to support FactSetters throughout the year. These efforts have included supporting a hybrid work model to maximize productivity, providing technology for efficient remote collaboration, and offering global wellness days to allow our teams to rejuvenate. By prioritizing the well-being of our workforce, we aim to attract and empower a talented team that creates value for all our stakeholders.

FactSet’s social impact is driven by our dedicated employee volunteers sharing their time and talent to strengthen our local communities. We contribute to our communities through our four pillars of service, which include inspiring tomorrow’s engineers, educating to elevate, alleviating food insecurity, and protecting the environment. In 2023, FactSetters contributed nearly 15,000 hours of volunteer service to benefit our community partners.

The FactSet Charitable Foundation is dedicated to building a future with diverse finance and technology leaders who will make the sector more innovative, sustainable, and equitable. The Foundation’s primary focus is providing financial support and expertise to non-profit organizations implementing innovative programs that empower underserved students to experience greater educational support and enrichment. The goal is to support programs that create pathways to and through college and on to technology careers. We hope that many students will be positively impacted by transformative educational experiences supported by the Foundation’s grants.

Building on FactSet’s History of Delivering Strong Returns

Although the macroeconomic landscape for fiscal 2024 is still evolving, I am optimistic about our ability to execute our strategy and deliver value to our stakeholders. There is remarkable work taking place across FactSet that will position us well for the future, and I am excited about the journey ahead.

Phil Snow
Chief Executive Officer