FactSet

FactSet Research Systems Inc.

Type	Public
Traded as	NYSE: FDS
Industry	Computer Services
Founded	1978
Founder(s)	Howard Wille and Charles Snyder
Headquarters	Norwalk, Connecticut, United States
Number of locations	26, in 12 countries
Key people	Phillip Hadley (CEO)
Revenue	US$806 Million (FY 2012)[1]
Operating income	US$273 Million (FY 2012)[1]
Net income	US$189 Million (FY 2012)[1]
Total assets	US$694 Million (FY 2012) [2]
Total equity	US$552 Million (FY 2011)[2]
Employees	Approx. 5,700
Website	factset.com

FactSet Research Systems Inc., trading as FactSet, is a multinational financial data and software company headquartered in Norwalk, CT, United States. The company provides financial information and analytic software for investment professionals.^[3] For fiscal year 2011, FactSet's annual sales were $727 million.

FactSet offers access to data and analytics to analysts, portfolio managers, and investment bankers at global financial institutions. The company does not offer products for individual investors. FactSet's business focuses on technology and client service. In addition to combining disparate databases, the company also develops its software. FactSet provides clients with consultants, telephone support, and training.^[4]

FactSet has been listed as one of Forbes’ "200 Best Small Companies".^[5] Its competitors include Bloomberg L.P., Thomson Reuters, and S&P Capital IQ.

History

1977 to 1980

FactSet was founded by Howard Wille and Charles Snyder in 1978. Their partnership began in 1977 when the two were working on Wall Street at Faulkner, Dawkins & Sullivan, a pioneer of institutional research.^[6]

As computers became more prominent at the end of the 1970s, Wille and Snyder knew that the industry was changing. When Shearson purchased Faulkner, Dawkins and Sullivan and the company started to expand, Wille and Snyder decided to set out on their own and test their idea for a company that could deliver computer-based financial information. At the time, companies had to purchase raw data directly from a vendor such as Compustat, then hire programmers to make the data user-friendly. Wille and Snyder’s vision would offer usable data directly to the client.

Originally, all data was delivered to clients on paper, often by bike messenger. The first and namesake product was a program called "Company FactSet," which produced a four-page company analysis report using the Value Line database. Today, FactSet users connect to FactSet’s private network via WAN, Internet, and wireless devices.

1981 to 1989

In the early 1980s, FactSet employees numbered fewer than 10. In 1981, Snyder found a way to download data from the FactSet computer into Visicalc, meaning that clients could retrieve data from a database directly into a spreadsheet. For the first time, several steps in the process were eliminated, making the data download process dramatically quicker.

In 1984, FactSet added limited screening capabilities, which were expanded in 1988 with the introduction of Universal Screening, which allowed users to stipulate their own screening criteria. Another important development during the 1980s was the 1989 release of the company's Private Database Service. Users could now store proprietary data and integrate it with their own information to perform custom analysis.^[6]

Current CEO Philip A. Hadley joined the company as a Consultant in 1985.

1990 to 2000

FactSet for Windows was released in 1990. That same year, company headquarters moved from New York City to Greenwich, CT.

A London office opened in 1993, the first in Europe. The first Asia-Pacific office opened in Tokyo in 1995. Today the company has 23 locations in 11 countries and more than 3,400 employees.

By the end of 1995 FactSet had fewer than 400 customers, but they included 84 of the United States' top investment managers. The company also changed its name in June 1995, becoming FactSet Research Systems Inc. in preparation for becoming a public company. The company began trading on the New York Stock Exchange in 1996 under the symbol FDS.^[7]

In 1997 the company released Portfolio Management Workstation, which was followed a year later by the Economic Analysis and Company Explorer applications.

The product became easier to use in 1998 with the release of the DIRECTIONS interface and the addition of Online Assistant, a web-based help and reference tool. FactSet introduced 24-hour live telephone support in 1999.

Wille retired as CEO and chairman in May 2000, Snyder stepped in as CEO on an interim basis, serving until September of that year, when Hadley was named the new CEO and chairman.

2000 to 2009

New products in the early 2000s included a portfolio returns product, SPAR (Style, Performance and Risk), that allowed portfolio managers to analyze the risks and performance of their own funds as well as compare them with peer funds; the Data Central application, which allowed subscribers to create and save their own time-series databases; and Marquee, which combined real-time news and stock quotes with security-level analysis.^[6] In 2004, the company's sell-side platform, IBCentral, was released.

Also in 2004, the company relocated headquarters and consolidated its three Connecticut offices to Norwalk, CT. Sales topped the $200 million mark for the first time in 2002 and $500 million in 2008.

In 2008, FactSet acquired a copy of the Thomson Reuters WorldScope database, which it develops and markets as FactSet Fundamentals.

2009 to present

In 2009, FactSet combined its DIRECTIONS, Marquee, and IBCentral platforms into one product, called FactSet.^[8] The platform combined the features of the previous platforms with new shared online workspaces and faster analytics. Also in 2009, FactSet integrated Data Explorers short selling data on the Factset Research Systems analytics platform.^[9]

In January 2010, FactSet and FirstRain announced a partnership that would allow FactSet clients to access FirstRain's web research engine that finds, filters, and analyzes unstructured business data available online.^[10]

In May 2010, FactSet completed the acquisition of the Thomson Fundamentals database.^[11]

In June 2010, FactSet acquired Market Metrics, a market research firm situated in the United States that is solely focused on surveys conducted on advisor and insurance products.^[12]

Highlights of 2011 include the addition of a package for colleges and universities in January,^[13] the integration of Proquote trading functionality in April,^[14] and the addition of Trucost environmental research data in August.^[15]

In June 2012, FactSet acquired StreetAccount, which provides real-time company updates, portfolio and sector filtering, email alerts, and market summaries for investment professionals.^[16]

Products and services

Products^[17]

FactSet provides financial information and analytical applications to global buy and sell-side professionals, including portfolio managers, market research and performance analysts, risk managers, sell-side equity researchers, investment bankers, and fixed income professionals. FactSet's software platform, also called FactSet, includes real-time news and quotes, company and portfolio analysis, multi-company comparisons, industry analysis, company screening, portfolio optimization and simulation, predictive risk measurements, alphatesting and tools to value and analyze fixed income securities and portfolios.

FactSet is available via wireless devices such as iPad and iPhone and is integrated with Microsoft Office applications.^[18]

Services

• Consulting: Each firm is assigned a Consultant who becomes familiar with client needs and processes. Clients also have access to Consulting Services phone support.^[19]
• Training: FactSet hosts free training seminars in its New York, Boston, Chicago, London, Paris, and Tokyo training centers. Consultants can also arrange personalized training sessions at client offices.^[20]
• Security: FactSet maintains physical, electronic, and procedural safeguards to address security and business continuity risks.
• Multiple Access Points: Every FactSet client receives access on an office PC, laptop, home computer, and wireless device.

Clients^[17]

As of August 31, 2012, there were over 49,500 users of FactSet spread across 2,392 clients in 50 countries. Approximately 68% of its revenues during the fiscal year ended August 31, 2012 (fiscal 2012), were from its client base in the United States, and 24.5% were from the client base in Europe and 7.2% in Asia Pacific. In fiscal 2012, FactSet generated approximately 81% of its revenues from investment management clients and the remainder is from sell-side firms who perform mergers and acquisitions (M&A) advisory work and equity research.

Financial data

In 2003, FactSet Research Systems Inc. changed the presentation of its revenues in order to report on a net rather than gross basis. As a result, all financial information for periods prior to the fourth quarter of fiscal 2003 were restated.^[21]

For 2012, FactSet’s 34th year of operation, the company recorded its 32nd consecutive year of revenue growth.^[22]

For the fiscal year ended August 31, 2012, FactSet revenues increased to $806 million, up 11% compared to the prior year. Operating income rose 15% to $273 million. Net income advanced to $189 million as compared to $40.9 million in 2011, a 10% increase. Diluted earnings per share increased by 14% up to $4.13 up from $0.88 in the same period of fiscal 2011.

Income Statement (all numbers in thousands)^[22]

Investor concerns

The company receives data from providers such as Barra, Dow Jones, Russell, and Lipper. Since contractual relationships with third-party vendors can be terminated with one year’s notice, the company tries to maintain relationships with at least two vendors for each type of data ^[23] Recently the company has attempted to maintain or increase its available content by building its own databases or by acquiring content providers. Since 2000, FactSet has made 10 acquisitions, seven of which have been content providers.^[24] In 2008, FactSet bought a copy of Thomson's fundamentals database,^[25] securing permanent access to global financial data stretching back to 1980.^[26]

Management

• Philip A. Hadley, Chairman of the Board, Chief Executive Officer^[27]
• Peter G. Walsh, Chief Operating Officer
• Charles J. Snyder, Vice Chairman of the Board
• Michael D. Frankenfield, Director, Global Sales

Recruiting

Employee headcount increased 9% from 5,251 to 5,735 during fiscal 2012. Total headcount grew by 28% in fiscal 2011. Most of this headcount came from the Asia Pacific region(India).^[22] Most new employees are recruited for the Consulting and Engineering departments, with many coming directly from college. The company’s employee retention rate has historically averaged 90%.^[28]

References

External links

• FactSet Homepage