FactSet

FactSet Research Systems Inc.

Type	Public
Traded as	NYSE: FDS S&P 400 Component
Industry	Financial services Technology
Founded	September 1978 (1978-09)
Founder	Howard Wille and Charles Snyder
Headquarters	Norwalk, Connecticut, U.S.
Number of locations	46, in 20 countries
Key people	F. Philip Snow (CEO)
Revenue	US$1.13 billion (FY 2016) [1]
Operating income	US$350 Million (FY 2016)[1]
Net income	US$339 Million (FY 2016)[1]
Total assets	US$1,019 Million (FY 2016) [1]
Total equity	US$517 Million (FY 2016)[1]
Number of employees	8,000+ (FY 2016)[1]
Website	www.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.^[2] For fiscal year 2016, FactSet's annual sales were $1.13 billion.^[1]

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.^[3]

FactSet's competitors include Bloomberg L.P., Thomson Reuters and S&P Capital IQ.

History

1977–1980

FactSet was founded by Howard Wille and Chunk Snyder in 1978. Their partnership began in 1977 when the two were working on Wall Street at Faulkner, Dawkins & Sullivan.^[4]

As computers became more prominent at the end of the 1970s, Wille and Snyder thought 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.

1981–1989

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 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.^[4]

Current Chairman Philip A. Hadley joined the company as a consultant in 1985.

1990–2000

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.

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.^[5]

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.

2000–2009

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.^[4] 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–present

In 2009, FactSet combined its DIRECTIONS, Marquee, and IBCentral platforms into one product, called FactSet.^[6] 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.^[7]

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.^[8]

In June 2008, FactSet completed the acquisition of the Thomson Fundamentals database.^[9]

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.^[10]

Highlights of 2011 include the addition of a package for colleges and universities in January,^[11] the integration of Proquote trading functionality in April,^[12] and the addition of Trucost environmental research data in August.^[13]

In June 2012, FactSet acquired StreetAccount, which provides real-time company updates, portfolio and sector filtering, email alerts, and market summaries for investment professionals.^[14]

In 2013, FactSet acquired Revere Data, a provider of a line-of-business industry taxonomy, now branded FactSet Revere.^[15]

On February 9th 2015, FactSet acquired Code Red Inc, a leading provider of Research Management technology to the financial community. ^[16]

On October 16th 2015, FactSet completed its acquisition of Portware, LLC, a leading multi-asset execution management system (EMS) provider. According to FactSet press releases, the $265 million acquisition--FactSet's largest to date--aims to "provide the investment community with state-of-the-art analytic and execution applications across more of the portfolio lifecycle, from analyst to portfolio manager to trader." ^{[17] [18]}

Products and services

Products

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.^[19]

FactSet is available via wireless devices such as iPad and iPhone and is integrated with Microsoft Office applications.^[20]

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.^[21]
• 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.^[22]
• 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, and wireless device.

Clients

As of August 31, 2016, there were over 65,655 users of FactSet, up 5.5% year on year. The number of clients subscribed to FactSet increased by 3.9% to 3,092. The annual client retention rate stands at over 95%.^[1]

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.^[23]

For 2014, FactSet's 36th year of operation, the company recorded its 34th consecutive year of revenue growth.^[24]

For the fiscal year ended August 31, 2014, FactSet revenues increased to $920 million, growing 7% year on year. Operating income rose 12% to $302 million. Net income advanced to $212 million as compared to $199 million in 2013, a 6% increase. Diluted earnings per share increased by 11% to $4.92.^[24]

For the quarter ended February 28, 2015 (Second Quarter Of Fiscal 2015), revenues advanced to $247.8 million, up 9.2% over the prior year. Annual Subscription Value ("ASV") was $1.005 billion at February 28, 2015, up 8.5% organically over the prior year.^[25]

Income Statement (all numbers in USD thousands)^[24]

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. ^[26] 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.^[27] In 2008, FactSet bought a copy of Thomson's fundamentals database,^[28] securing permanent access to global financial data going back to 1980.^[29]

Management

• Philip A. Hadley, Chairman of the Board of Directors, ^[30]
• F. Philip Snow, Chief Executive Officer and Director
• Maurizio Nicolelli, Senior Vice President, Chief Financial Officer
• Mark J. Hale, Chief Operating Officer
• John W. Wiseman, Global Head of Sales and Client Solutions
• Rachel R. Stern, Senior Vice President, Strategic Resources, General Counsel and Secretary
• Edward Baker-Greene, Chief Human Resources Officer

References

External links

• Official website