FactSet (FDS) Stock Slides After Q1 FY2026 Earnings: Revenue Beat, Guidance Reaffirmed, and a $1 Billion Buyback — What Investors Are Watching (Dec. 18, 2025)

FactSet Research Systems Inc. (NYSE: FDS) delivered a “beat-and-dip” kind of morning on Thursday, December 18, 2025: the company topped Wall Street expectations for revenue and adjusted earnings in its fiscal first quarter, reaffirmed full‑year guidance, and expanded its share repurchase authorization to $1 billion—yet the stock fell sharply in trading. ^[1]

That tension captures the current mood around FactSet stock: investors are weighing steady subscription growth and durable retention against margin pressure from heavier technology/content spending—and the broader anxiety that AI tools could reshape the financial information market faster than incumbents can monetize the shift. ^[2]

What happened to FactSet stock today

FactSet shares dropped roughly 7% intraday, trading around the mid‑$270s by early afternoon Eastern time on December 18 (after closing at $296.13 on Wednesday). ^[3]

The decline came despite a clean headline beat: FactSet posted adjusted EPS of $4.51 and revenue of $607.6 million for the quarter ended November 30, 2025, both ahead of common consensus estimates tracked by Zacks. ^[4]

Q1 FY2026 earnings: the key numbers

FactSet reported fiscal Q1 2026 GAAP revenue of $607.6 million, up 6.9% year over year, while “organic” revenue (excluding certain acquisition/disposition and FX impacts) grew 6.0% to $600.0 million. Management attributed growth primarily to institutional buy‑side and dealmakers clients. ^[5]

Profitability was a little more complicated:

GAAP diluted EPS:$4.06 (up 4.4% YoY)
Adjusted diluted EPS:$4.51 (up 3.2% YoY)
GAAP operating margin:31.6%, down about 200 bps YoY
Adjusted operating margin:36.2%, down 137 bps YoY ^[6]

In other words: the business grew, earnings rose, but margins compressed—exactly the kind of detail that can matter more than the “beat” when a stock’s valuation thesis depends on steady operating leverage.

Subscription growth: why ASV is still the center of the story

For FactSet investors, Annual Subscription Value (ASV) is the heartbeat metric because it represents the forward-looking annualized value of subscription services currently provided to clients.

At November 30, 2025, FactSet reported:

ASV:$2,411.1 million (vs. $2,265.9 million a year earlier)
Organic ASV:$2,389.6 million, up 5.9% YoY ^[7]

But one line in the earnings release is doing a lot of work in investor minds: organic ASV increased just $6.6 million over the last three months. That doesn’t mean growth is gone—ASV is up solidly year over year—but it does flag that net new momentum in the most recent quarter was modest, which can make traders twitchy when the market is demanding “proof” of acceleration. ^[8]

Regionally, FactSet showed broad-based organic revenue growth, with reported quarterly revenues of $396.2M (Americas), $149.5M (EMEA), and $61.9M (Asia Pacific); Asia Pacific again led growth rates. ^[9]

Operationally, FactSet’s retention and footprint stayed strong:

ASV retention:>95%
Client retention:91%
Clients:9,003 (net +7 in the quarter)
Users:239,863 (net +2,539 in the quarter) ^[10]

The margin debate: investing now, proving payoff later

FactSet is leaning into technology and product investment—especially around data delivery and AI-enablement—at the cost of near‑term margin pressure. In the earnings release, the company cited higher amortization, compensation costs, and technology-related expenses on the GAAP side, and higher technology and third-party content expenses on the adjusted side. ^[11]

On the earnings call, management reinforced that investment ramp: the CFO indicated Q2 operating margins should reflect a planned step‑up in investment, even as the company reaffirmed full‑year targets. ^[12]

This sets up a very classic investor standoff:

The bull case: “Spend now to defend the moat, modernize workflows, and monetize AI distribution.”
The bear case: “Spending rises while net new subscription value isn’t accelerating fast enough.”

Neither side is obviously irrational—finance is often just two plausible stories wrestling in a phone booth.

Capital returns: $1 billion repurchase authorization and the dividend

One of the biggest headline items on December 18 was shareholder return.

FactSet’s board approved an increase in share repurchase authorization from $400 million to $1 billion. During Q1 FY2026, the company repurchased 478,100 shares for $139.9 million at an average price of $292.61, and then added $600 million of incremental repurchase authority (approved December 16 and available immediately). ^[13]

FactSet also paid a quarterly dividend of $1.10 per share on December 18, 2025 (to holders of record as of November 28, 2025). ^[14]

At a stock price around the mid‑$270s on Thursday, the annualized dividend rate of $4.40 implies a yield around the mid‑1% range (dividend yield will vary with price). ^[15]

FY2026 forecast: FactSet reaffirms guidance (and that matters)

FactSet reaffirmed its fiscal 2026 outlook (originally provided September 18, 2025), including:

Organic ASV growth:$100M to $150M
GAAP revenue:$2.423B to $2.448B
GAAP operating margin:29.5% to 31.0%
Adjusted operating margin:34.0% to 35.5%
GAAP EPS:$14.55 to $15.25
Adjusted EPS:$16.90 to $17.60 ^[16]

Zacks’ coverage on the day highlighted that, while results beat estimates, FactSet’s FY2026 guidance midpoints for revenue and adjusted EPS were a touch below certain consensus figures tracked there—another possible contributor to the stock’s negative reaction. ^[17]

Analyst outlook: price targets still above, but sentiment is cautious

Analyst sentiment around FactSet remains mixed and, in many aggregations, cautious. A MarketBeat roundup published December 18 noted a blend of Buy/Hold/Sell ratings and summarized several notable target moves in recent months, including:

Wells Fargo: target cut to $260, “underweight” (Dec. 5)
UBS: upgraded to buy, target $425 (Sept. 22)
BMO: target reduced to $324, “market perform” (Sept. 19)
Wolfe Research: “underperform,” target $290 (Nov. 14) ^[18]

That same summary placed an average price target in the high‑$300s and characterized consensus sentiment as closer to “Reduce” than “Buy,” reinforcing that many analysts want clearer evidence of re-acceleration before getting enthusiastic. ^[19]

The AI overhang: threat, tailwind, or both?

FactSet stock’s 2025 slump has been tightly bound to the market’s shifting view of “information services in the age of large language models.” A MarketWatch analysis this week described FactSet as one of the notable decliners in 2025 amid fears AI could erode demand for research-driven subscription offerings—while also arguing that high-quality, curated datasets and distribution moats are hard to replicate and may become even more valuable in an AI-heavy world. ^[20]

FactSet’s management is clearly leaning into that “AI makes our data more valuable” framing. On the earnings call, CEO Sanoke Viswanathan put it bluntly: AI doesn’t replace what makes FactSet essential; it amplifies it—and management discussed growing adoption of AI-enabled capabilities. ^[21]

The company is also building plumbing for AI integration. In the earnings release, FactSet highlighted (after quarter-end) the availability of what it described as an industry-first “production-grade” Model Context Protocol (MCP) server to let models interact with FactSet datasets, plus distribution partnerships like Amazon Quick Research and Arcesium integration. ^[22]

Why the stock fell anyway: “Good” can be the enemy of “good enough”

Putting the day’s coverage together, the market’s reaction makes more sense (even if it’s still annoying for holders):

Margins moved down year over year, and management is signaling more investment near-term. ^[23]
Guidance was reaffirmed, but some observers noted midpoints that were slightly shy of certain consensus estimates. ^[24]
Net new organic ASV over the last three months was modest, a detail that tends to dominate the narrative when investors want proof of acceleration. ^[25]
The stock is still carrying the AI disruption narrative, even as management tries to reframe AI as a distribution tailwind. ^[26]

Meanwhile, Reuters noted demand for FactSet’s offerings has been supported by clients navigating uncertainty tied to shifting U.S. trade policies—helpful for near-term usage, but not necessarily a clean long-term growth catalyst investors can model with confidence. ^[27]

What to watch next for FactSet (FDS) investors

In the coming quarters, the debate likely comes down to a few measurable checkpoints:

Organic ASV net new: Does quarterly net add re-accelerate beyond the recent $6.6M three‑month increase? ^[28]
Margin trajectory vs. the investment plan: Management has essentially asked the market for patience while it funds product, cloud, and AI-enabled workflow initiatives. ^[29]
Wealth and “off‑platform” expansion: FactSet continues to point to growth in wealth and broader data/API embedding as strategic pillars. ^[30]
Capital return pace: The expanded buyback authorization gives FactSet flexibility—investors will watch how aggressively it uses it at current price levels. ^[31]
AI monetization clarity: Investors want to see AI drive measurable expansion, retention durability, and pricing power—not just product adoption anecdotes. ^[32]

FactSet’s quarter delivered plenty of proof that the core machine still runs: revenue grew near 7%, subscription value rose, retention stayed high, and shareholder returns increased. ^[33]
The stock’s drop is the market’s way of saying: “Show me the next gear.”

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