FactSet (FDS) Q4 2025 Earnings Call Transcript

Image source: The Motley Fool.

Date

Sep. 18, 2025 at 9 a.m. ET

Call participants

• Chief Executive Officer — Sanuk Viswanathan
• Chief Financial Officer — Helen Shan
• Chief Revenue Officer — Goran Skoko
• Manager, Investor Relations — Kevin Toomey

Need a quote from a Motley Fool analyst? Email pr@fool.com

Risks

• Helen Shan stated that clients are being strategic in their technology investments and look for battle-tested solutions with institutional credibility. This selectivity can mean longer sales cycles and rigorous scrutiny. Performance reflects two key differentiators: the quality and breadth of data and technology.
• Guidance for fiscal 2026 reflects "a conservative approach to our guidance to reflect the current environment of longer sales cycles and more rigorous client approval processes," according to Helen Shan, indicating potential uncertainty in pipeline conversion timing.
• Helen Shan noted that the EMEA region faces "secular headwinds" for midsized asset managers and asset owners, which may constrain growth in that geography.
• People-related expenses increased $27 million, or 13% year over year, primarily due to higher bonus accruals and workforce expansion.

Takeaways

• Revenue-- Revenue: $2.3 billion for fiscal 2025 (ended Aug. 31, 2025), reflecting 5.4% total growth and 4.4% organic growth.
• Adjusted operating margin-- 36.3% for the year, with a Q4 margin of 33.8%, both within guidance bands.
• Adjusted EPS-- $16.98 adjusted EPS for fiscal 2025, rising to $4.05 in Q4, representing 8% year-over-year growth.
• Organic ASV growth-- $127 million in organic ASV added for fiscal 2025 and $81.8 million in Q4 alone, marking the largest quarterly organic ASV increase in company history and a sequential acceleration to 5.7% growth.
• Regional organic ASV-- Americas organic ASV up 6%, EMEA up 4%, and Asia Pacific up 7% in Q4, each showing sequential improvement, with Asia Pacific offsetting pricing pressures through solution expansion and new client acquisition.
• Wealth segment-- Achieved over 10% organic growth in Q4, including multiple 7-figure expansion deals and more than 50% growth in off-platform ASV.
• Buy-side ASV-- Institutional buy-side delivered its largest quarterly ASV growth on record, accelerating full-year organic ASV growth to 4%, attributed to demand for analytics and front/middle office data solutions.
• Partnerships and CGS-- Segment growth reached 8% for fiscal 2025, driven by significantly improved retention and high issuance activity.
• AI product impact-- Helen Shan said, "When we gave guidance of 30 to 50 basis points, I'm happy to say we landed exactly in the middle for fiscal 2025." This confirms that stand-alone AI product monetized growth was within guidance for fiscal 2025.
• AI contribution to sales-- Goran Skoko stated, "About 60% of our AI tooling and content sales occurred in Q4 fiscal 2025." Additionally, "35% of Q4 renewals cited GenAI tooling or strategy in their selection decisions."
• Client base and user growth-- Client count grew to 9,000, a nearly 10% year-over-year increase, with over 237,000 users, led by wealth segment expansion.
• Capital returns-- $107 million in Q4 share repurchases, completing a $300 million buyback; $1.10 quarterly dividend paid and a 6% dividend increase in Q3; over $460 million returned to shareholders in fiscal 2025 through buybacks and dividends.
• Debt and financial position-- Gross debt leverage ratio reduced to 1.5x, with over $600 million in free cash flow for fiscal 2025, supporting ongoing investment capacity.
• Divestiture-- RMS Partners, a non-core business, was divested just before fiscal year-end, resulting in a one-time gain in results with no material effect on adjusted results in fiscal 2025.
• Fiscal 2026 guidance-- Organic ASV growth targeted at $100-$150 million (about 5% at midpoint); revenues guided to $2.42-$2.45 billion; adjusted operating margin 34%-35.5%; adjusted EPS range $16.90-$17.60; EPS range $14.05-$15.25; capital expenditures projected at $110-$120 million; tax rate estimated at 18%-19% for fiscal 2026.

Summary

FactSet Research Systems(NYSE:FDS) reported record organic ASV gains and broad-based revenue growth, with management emphasizing deepening client integration, enterprise platform expansion, and the monetization of AI offerings as key drivers for recent wins and competitive displacements. Structural cost increases, headwinds for specific segments, and conservative fiscal 2026 guidance frame expectations for margin and top-line outcomes as investment in AI and workflow integration continues, according to company guidance. The company divested a non-core platform and maintained robust capital return, balance sheet strength, and a positive outlook for productivity improvements propelled by AI and digital strategy.

• CEO Sanuk Viswanathan described FactSet as "extremely well positioned to become the leading AI powered financial intelligence platform for our clients," but acknowledged that material transformation work remains.
• The company integrated recent acquisitions, such as Liquidity Book and Irwin, to strengthen its analytics and IR capabilities, and reported early conversion of AI trials to signed deals.
• Expanding real-time data feeds, embedding AI across workflows, and launching the AgenTeq platform form the core of the multiyear growth roadmap outlined for fiscal 2026.
• Helen Shan noted FactSet's wider margin "provides us the flexibility to invest more if opportunities exceed expectations," pointing to a disciplined but opportunistic investment posture.
• FactSet retained control over commercial AI relationships and intellectual property as it manages the growing presence of AI startups in client workflows.

Industry glossary

• ASV (Annual Subscription Value): The annualized value of recurring subscription contracts, excluding professional services unless specifically referenced.
• GenAI: Generative Artificial Intelligence products and tools aimed at automating and enhancing client workflows with FactSet data.
• OMS (Order Management System): Enterprise trading platform component integrated by FactSet to manage the trade lifecycle for buy-side and wealth clients.
• AgenTeq: FactSet’s proprietary AI-enabled platform initiative targeting workflow automation and data integration.
• CGS (CUSIP Global Services): Proprietary FactSet data segment focused on security identification for financial markets.
• RMS Partners: FactSet’s now-divested sell-side research platform that was part of the deal makers segment.
• PLC (Portfolio Lifecycle): Suite of FactSet products and services addressing the full investment management workflow from analytics to trade execution.

Full Conference Call Transcript

Kevin Toomey: Thank you, and good morning, everyone. Welcome to FactSet's fourth quarter and fiscal 2025 earnings call. Before we begin, the slides we referenced during this presentation can be found through the webcast on the investorrelationssectionofourwebsite@factset.com. A replay of today's call will be available on our website. After our prepared remarks, we will open the call to questions. The call is scheduled to last for one hour. To be fair to everyone, please limit yourself to one question. You may reenter the queue for additional follow-up questions, which we will take if time permits.

Before we discuss our results, I encourage all listeners to review the legal notice on slide two. Discussions on this call may contain forward-looking statements. Such statements are subject to risks and uncertainties that may cause actual results to differ materially from results anticipated in these forward-looking statements. Additional information concerning these risks and uncertainties can be found in our forms 10-K and 10-Q. Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliations to the most directly comparable GAAP measures are in the appendix to the presentation and in our earnings release issued earlier today, both of which can be found on our website at investor.factset.com.

During this call, unless otherwise noted, relative performance metrics reflect changes as compared to the respective fiscal 2024 period. Also, consistent with the past three quarters, please note that in fiscal 2025, we started reporting organic ASV rather than organic ASV plus professional services to focus on the recurring nature of our revenues. Joining me today are Sanuk Viswanathan, Ellen Shan, chief financial officer, and Goran Skoko, chief revenue officer. I will now turn the discussion over to Sanuk Viswanathan.

Sanuk Viswanathan: Thank you, Kevin, and good morning, everyone. Thank you for joining us today. I'm Sanuk Viswanathan, and I'm honored to speak with you as the new CEO of FactSet. I want to begin by recognizing Phil Snow for his remarkable leadership. Over more than three decades, Phil has helped propel FactSet into a global leader in financial data and analytics, scaling our business to well over $2 billion while staying relentlessly client-focused and innovating with purpose, establishing the company as an industry leader. He leaves behind a legacy underpinned by open platform superior client service and deep workflow integration. We are all grateful and I personally am inspired to build on that legacy.

Let me share why I'm here and what excites me about FactSet's future. We are at a strategic inflection point in our industry. AI and data-driven innovation are transforming how financial institutions operate, invest, and serve clients, which is driving increased demand for quality data. My career has always been at the intersection of finance and technology, and I believe the next decade is going to be defined by those companies that can deliver trusted integrated financial intelligence to their clients. I've been a FactSet client for years, and I have been studying the company deeply for the last six months, and I believe we have a unique opportunity to become the leading AI-powered financial intelligence platform for our clients.

In my first week here, I visited our major offices and met hundreds of colleagues. I'm inspired by the energy and passion across our teams to continue innovating and rolling out new products, datasets, and solutions for our clients. I've kicked off reviews of our product roadmap and client implementations, including various AI initiatives. I've also been welcomed by dozens of senior clients and partners that are keen to explore opportunities for growth. This last week has reinforced my long-held beliefs. That I'm sure you all share as many of you are also direct users of FactSet solutions.

Sanuk Viswanathan: Number one, we provide unparalleled client service. Clients like their FactSet consultant, and count on them to be their trusted partner when it comes to resolving the most complex and sophisticated questions. This level of client conviction and trust has been earned by delivering high-quality solutions for decades, anchored in deep domain expertise and a client-centric culture. The passion for client service runs throughout the company, and I see it in my leadership team, most of whom started their careers as FactSet consultants. Number two, we are deeply embedded in our clients. Across the buy side, dealmakers, and wealth clients, we are used in their front, middle, and back offices to execute complex tasks every single day.

Our data, tools, insights, and solutions help clients research and create new business opportunities, perform complex analyses, and execute transactions in the front office. We run performance attribution and risk analytics for over 6 million institutional client portfolios every night and help streamline reporting and operations, minimize risk, and drive productivity. We also integrate more than 15 million wealth portfolios, enabling advisers to monitor their books of business like never before. We have a great starting point as an enterprise partner to enable clients to transform and even disrupt their existing workflows. And this is evident in our recent performance.

Number three, we are uniquely geared for collaboration. FactSet's open architecture is fundamentally designed to enable clients to combine their own proprietary knowledge with FactSet's proprietary datasets and insights and with other third-party data our clients see value in. We are cloud native, think API first, and partner every day with hundreds of data providers worldwide. We are not bogged down with legacy integrations or business model conflicts. This is a huge advantage when it comes to implementing AI agentic workflows at scale with dozens and hundreds of integration points up and down the technology stack and across the ecosystem of our clients.

In sum, I believe we are extremely well positioned to become the leading AI powered financial intelligence platform for our clients. I recognize there is significant work ahead of us as AI continues to transform our industry and create new competitive dynamics.

As I look ahead, my focus will be on engaging with clients on their top priorities and continuing to build my knowledge base about FactSet's data, tools, and services. I will be working closely with my leadership team to refine our long-term vision and strategy and product roadmap with a particular emphasis on AI. We are operating from a position of strength, FactSet has a long track record of profitable growth, a differentiated position in the market and a distinct value proposition for our clients. With more than $600 million of free cash flow, and a strong balance sheet, we are able to invest confidently in our future.

Given the growth we are experiencing, combined with the significant opportunity ahead of us, we are continuing to invest in the business this year. And Helen will share more details shortly. I believe in a disciplined, measured approach to investing, for long term growth guided by the needs of our clients and focused on generating attractive returns for our shareholders. I look forward to partnering with clients, colleagues, and shareholders and sharing more of my vision in the spring. With that, I'll turn it over to Helen to discuss our Q4 performance and FY '26 outlook.

Helen Shan: Let me start by welcoming you, Sanuk. I look forward to working with you for the next phase of FactSet's journey. It's going to be an exciting time for everyone. With that, I will now share fourth quarter and full year fiscal 2025 results. This year has been marked by change. In the markets, economic policies, and in technology. Against this backdrop, FactSet continued to perform well, executing against our plan and finishing fiscal 2025 with strength. We made meaningful progress against our multi-year AI roadmap, embedded FactSet deeper into client workflows by integrating Liquidity Book for seamless buy-side trading, and added Irwin to serve corporate IR needs. All while continuing to advance our open platform strategy.

For FY '25, we added $127 million of organic ASV, near the top end of our guidance range. Annual revenue increased to $2.3 billion while adjusted operating margin was 36.3% and adjusted EPS grew to $16.98, all comfortably within our guidance ranges. We anticipated better performance in the second half of the year and I am really pleased to report excellent fourth quarter results. Our Q4 organic ASV of $81.8 million was the largest quarter in the company's history, representing a sequential acceleration in growth to 5.7%. This improvement was fueled by recent wins in wealth, asset management, underpinned by increasing demand for our data solutions.

Product drivers came from Q4, data, wealth solutions, and our analytics suite. Within data, demand for real-time and benchmarks was significant for the buy side. We're pleased with the early success of our investments in AI as a number of trials were converted into signed deals in the quarter. We have top-line momentum as we close fiscal 2025. With that, let's review the quarterly results in more detail. Starting with our regional performance, In The Americas, organic ASV growth this quarter accelerated sequentially to 6%. What was encouraging was the breadth of growth with asset managers increasing their technology investments and wealth continuing to be a standout performer our platform capturing share from legacy providers. In EMEA, organic ASV growth improved to 4%. We executed on strategic wins this quarter, including a competitor displacement at a large asset manager. While we are seeing a recovery in The UK market, midsized asset managers and asset owners in the region continue to face secular headwinds. Importantly, we are using this period to deepen our relationships and expand our footprint within existing accounts. In Asia Pacific, organic ASV growth increased 7% this quarter. While we faced pricing pressures in some markets, we are offsetting this through solution expansion and new client acquisition. The demand for middle-office solutions and AI-ready data is strong here, as firms modernize their operations to compete globally. Our workstation growth reflects increasing adoption by local and regional players who recognize they need institutional-grade tools to serve sophisticated clients. Across all regions, we are seeing the same trend: Clients are consolidating vendors and choosing platforms that can deliver integrated AI-enhanced workflows. Clients want comprehensive solutions that transform how they operate.

Now turning our results from a firm type perspective. Wealth delivered strong Q4 performance with continued organic growth at greater than 10%, fueled by 7-figure deals including two competitive displacements, We successfully captured market share from incumbent providers while driving higher expansion through our real-time and markets data offerings. Our land-and-expand strategy is proving effective as existing desktop clients increasingly adopt our data feeds and digital solutions. Off-platform ASV with wealth clients grew more than 50% year over year, continuing to expand our enterprise footprint outside of the wealth workstation. For FY '25, Dealmaker's organic ASV grew 4% year over year.

Banking delivered strong quarterly results as clients are expressing confidence in our AI roadmap and choosing FactSet as their partner of choice in their own AI journey. With multiyear contracts securely in place with all of our top 15 largest banking clients, including all of the global bulge bracket banks and leading independent banks, we are leveraging our long-standing C-suite relationships to position for growth, across the client's enterprise. Our banker productivity tools continue to drive demand with PitchCreator, LogoIntern, and our market-leading office integration solutions helping both retention and expansion.

Lastly, improved market conditions led to better lateral and summer hiring trends, as experienced across our bulge bracket clients. Outside of banking, PEVC and corporates also performed well during the quarter. The integration of Irwin and FactSet provides IR users with an end-to-end workflow solution which is driving seat count growth and accelerating cross-sell momentum as we expand further into the office of the CFO. Back in June, we noted that most of our Q4 pipeline was from the institutional buy side. It delivered its largest quarterly ASV increase on record, accelerating FY 25 organic ASV growth to 4%. This increase reflects stronger demand for our analytics solutions in the front and middle office and especially for data.

Asset managers experienced strong growth with multiple 7-figure wins, improvement in both retention and expansion. Hedge funds growth accelerated for the fifth consecutive quarter driven by demand for data, a portfolio lifecycle offering with liquidity book and street account. Asset owners stabilized from last quarter, acceleration driven by an increase in demand for our data solutions and strength in the middle office. Growth in partnerships and CGS accelerated to 8% in FY 25, reflecting significantly improved retention, continued high issuance activity, and demand for our proprietary data offerings.

Our results reflect in part strategic investments we made throughout the year. We expanded our data content with real-time feeds benchmarks and aftermarket research to create a more differentiated workflow-ready data universe. And we immersed AI into our solutions and launched six distinct offerings that help automate complex tasks and enable future agentic workflows. These initiatives improved renewal rates, expanded client opportunities, and contributed approximately two-thirds of our organic ASV growth acceleration this year. These investments positioned us well to compete in a challenging environment. While we are encouraged by this quarter's momentum, we recognize that our success came against the backdrop of tight client budgets and evolving market dynamics. Clients are being strategic in their technology investments and look for battle-tested solutions with institutional credibility. This selectivity can mean longer sales cycles and rigorous scrutiny. But our performance reflects two key differentiators: the quality and breadth of our data and technology. Our competitive advantage starts with something that simply cannot be replicated easily, decades of curated, connected financial data that improves every day. Here's what's changed. We're not just collecting more data. We're making it exponentially more valuable through AI enhancement and real-time integration.

Our largest client wins this year demonstrated strong positioning. Forward direct displacements at wealth and buy-side clients, Three involved replacing clients' internal solutions, and one was a new managed services mandate for an existing client. Our largest losses tell a different story with two clients acquired by other companies and two strategic cancellations initiated in Q2 as we noted on a prior call. Importantly, we secured large renewals early, especially with premier global banking clients, generating momentum and pipeline visibility for fiscal 2026.

FactSet's ongoing investments in AI and continued progress driving tangible workflow improvements is being recognized by our largest clients, who are placing increased value in working alongside trusted partners to navigate the integration of AI advancements into their own businesses. This success translates into improved quality in our ASV. While annual price increases contributed less this year due to lower CPI, significantly stronger retention largely offset this impact, demonstrating that our products are mission critical and our investments to enhance our data and incorporate AI into our offerings are resonating with clients. We've also steadily improved expansion with existing clients each quarter this year while new business growth accelerated in the second half.

We continue structuring competitive multiyear deals to win new logos when the total contract value creates strong customer lifetime value. As a result, our client count grew to 9,000, nearly a 10% increase year over year driven by additions in corporate and wealth clients. Notably, we now have over 237,000 users with wealth driving growth in Q4 and for the full fiscal year.

Turning now to financial results. Fourth quarter revenues increased 6.2% year over year, reaching $597 million. In fiscal 2025, we delivered 5.4% overall revenue growth and 4.4% on an organic basis, marking more than 45 consecutive years of top-line growth. This track record demonstrates our resilience and consistent performance throughout market cycles. Alongside top-line growth, we continued disciplined expense management in Q4 to help self-fund our strategic investments while absorbing acquisition-related dilution. On an adjusted basis, operating expenses for the quarter grew 9.5% year over year. People-related expenses increased $27 million or 13% primarily due to higher bonus accruals and workforce expansion which included employees from our Irwin and Liquidity Book acquisitions.

Our headcount grew less than 2% in the quarter primarily in low-cost locations. Technology expenses grew $8 million or 13% reflecting higher internal use software amortization and increased cloud and software spend. As stated, we are concentrating our spend in AI capabilities to maintain market leadership through product innovation. We have effectively managed our other major expense categories. Third-party content costs increased $3 million versus the prior year, reflecting investments made in new datasets to support the research workflow, while real estate expense rose $2 million due to renewed leases and return to office expenses. Lower other expenses reflect better receivables collection and decisions to reduce discretionary spend.

These efforts resulted in an adjusted operating margin Adjusted earnings per share in the fourth quarter rose 8% on a year over year basis 33.8% for Q4. to $4.05, helped by a lower tax rate and a reduced number of weighted shares. For a detailed breakdown of our expense progression, from revenue to adjusted operating income, and reconciliations of adjusted results with comparable GAAP measures please reference the appendix in today's earnings presentation. On capital allocation, we repurchased approximately 260,000 shares at $107 million during the quarter, concluding our $300 million fiscal 2025 share repurchase program. As of September 1, we began executing against the new $400 million share authorization program approved by the board in June.

We paid a quarterly dividend of a dollar 10 per today to shareholders of record as of August 29. As a reminder, we increased our dividend by 6% in Q3, marking our 26th consecutive year of dividend increases on a stock split adjusted basis. Combined, we returned over $460 million to shareholders in fiscal 2025 through dividends and share repurchases, demonstrating our consistent commitment to delivering shareholder value.

We strengthened our balance sheet by reducing our term loan, achieving a gross debt leverage ratio of one and a half times, which provides significant financial flexibility. As part of our ongoing portfolio review, we divested RMS Partners, a non-core sell-side research platform within our deal makers offering just before fiscal year-end. This divestiture enables us to concentrate resources on our core growth areas and led to a one-time gain recognized in our GAAP results that had no material impact on our adjusted results in FY 25. To clarify, RMS Partners is distinct from our leading buy-side research management solution.

We remain committed to our internal research notes offering institutional buy-side clients where our core workstation now features AI-powered workflows designed to enhance research efficiency and insight generation. We're already seeing early positive signals from our past year's investments, and we plan to lean into areas where clients have demonstrated strong demand and where we can achieve clear outcomes. For fiscal 2026, we'll continue building on our momentum while investing for future growth. We're executing on data expansion efforts, widening our real-time and pricing reference data capabilities while extending proprietary data coverage across deep sectors, such as in TMT, power, and utilities.

We're embedding deeper into client workflows through our portfolio lifecycle solution, further integrating OMS and iBOR to our platform.

And we plan to simultaneously develop a comprehensive suite of AI ready data and our own AgenTeq platform as part of our multiyear AI roadmap. These investments will support growth in fiscal 2026 across all of our firm types. Wealth remains our growth engine. While we expect to continue to capitalize on competitor displacement opportunities, we plan to expand our offerings in both data feeds and analytics solutions, which include risk and OMS to meet the growing sophisticated needs of the advisers. We expect that buy side will benefit from the integration of liquidity book enabling us to fulfill larger portfolio lifecycle opportunities across performance, reporting, and trading.

We expect our markets, pricing and reference, and debt spark data feeds to continue to drive top line growth. We expect the enhanced offerings in our deep sector data and aftermarket research to support deal makers' growth, allowing us to expand to other banking teams such as TMT and credit risk. Our clients should further benefit from the AI capabilities we provide to enhance their workflows.

Our AI ready data enhancements benefit all firm types, including partnerships. We're strategically managing relationships with the growing number of AI startups used by our clients. We've maintained control over commercial relationships with our clients and have protections in place for our intellectual property. Moving forward, we plan to carefully balance content monetization through select providers while preserving our direct market presence and revenue streams. We expect to accelerate our focus on productivity. With the help of AI, we've been able to increase the speed of our content collection and expand our coverage in both street account and call street.

Applying what we've learned from developing AI solutions for our clients, we plan to invest to improve client service, reduce our technology debt, and further strengthen our infrastructure in areas such as data connectivity and cybersecurity. Experience in AI implementation reveals that quality data and middleware are not expenses but essential investments as companies who do not prioritize these foundations can face costly delays and challenges in capturing future benefits.

With that context, let's discuss our fiscal 2026 guidance. We anticipate continued strong demand for our solutions. Our outlook is supported by a first-half sales pipeline that's comparable to last year. We expect continued momentum in wealth, in line activity in banking and partners, and stability in the buy-side. Given these dynamics, we're guiding to organic AS growth of $100 to $150 million representing approximately 5% growth at the midpoint. We're taking a conservative approach to our guidance to reflect the current environment of longer sales cycles and more rigorous client approval processes and not due to reduced confidence in our competitive positioning or market demand.

GAAP revenues are expected to be in the range of $2.42 billion to $2.45 billion. We expect GAAP operating margin range of 29.5% to 31% and adjusted operating margin of 34% to 35.5%. This range incorporates expectations of higher technology and content costs and targeted investments in wealth and buy-side workflows. We expect some of these anticipated increases to be partially offset by productivity gains and cost discipline. Our wider margin provides us the flexibility to invest more if opportunities exceed expectations. Our GAAP EPS guidance range is from $14.05 to $15.25. Our adjusted EPS guidance range is from $16.90 to $17.60.

For fiscal 2026 modeling purposes, net interest expenses are expected between 43 to $48 million. Capital expenditures are projected at $110 to $120 million. The effective tax rate is projected to be between 18-19%. As we enter fiscal 2026, we're positioned at an inflection point where our strategic investments are beginning to translate into measurable competitive advantages. The convergence of client demand for workflow integration data modernization, and AI-enabled creates a compelling opportunity for FactSet to expand our market presence while deepening existing client and partnership relationships. We're not expecting dramatic market shifts to impact our growth.

Instead, we're methodically building capabilities that address genuine client needs while positioning FactSet to capitalize on secular trends reshaping how financial professionals access analyze, and act on information. This measured approach, combined with our established market presence and proven execution capabilities, forms the foundation for sustained value creation in the years ahead. Thank you for your time today. We'll now open up the call for questions. Operator?

Operator: Thank you. We ask that you please limit yourself to one question. Our first question comes from the line of Alex Kramm with UBS Securities. Your line is now open.

Alex Kramm: Yes. Hey, good morning, everyone. Welcome to Sanuk to the call and the company. I'm actually gonna start with the margin question. So I guess it's more for Helen. But maybe you can start by maybe breaking down how much of the kind of margin decline is really due to incremental investing versus just cost inflation, and where those investments are ultimately going in terms of new projects. And looking a little bit further ahead, I know this is fiscal year 26 beginning, but do you view this as a one-time kind of investment phase?

And when we get into 2027, we can start looking at margin expansion again, or do you think this is kind of like the new normal? Sorry for the loaded question. Thanks.

Helen Shan: Thanks for your questions, Alex. And let me kinda walk through. I think your question is both about '25 and then '26. So when we gave our range of 36 to 37, what we had in there, of course, was a normalization of our bonus to begin with. And quite frankly, what we've shown in this year is the ability to not only expand but absorb some of the dilution from our acquisitions. So the biggest impact from a dollar perspective was on the bonus and then I think the other piece, quite frankly, is some of the additional hiring that was supporting some of our investments.

But had it not been for the dilution, we would actually be above the midpoint of the range. As I think about the guidance going forward, I'll give you a little bit more detail to help walk you through that.

So when we think about the investments from '25, that we believe has given us some of that I'll call them green shoots of benefit. When we think about 2026, I would think the breakout there was really in two pieces. I would say that we're investing about, let's call it, 250 basis points really in growth investments. Two thirds of it would be in growth investments. And a third a bit more structural. Now, as we talked about on the call, the growth is in AI, in data, and in PLC. All of that is meant to drive the top line.

Structural will be on cyber and internal AI as well as helping to support further growth as it relates to our AI-ready data. So when we think about going forward, we're only talking about 2026 right now, so I won't go into any more details. But we would expect to get the operating leverage off of our structural investments and then expect top line, growth from the growth investments.

Operator: Our next question comes from the line of Faiza Alwy with Deutsche Bank. Your line is now open.

Faiza Alwy: Yes. Hi. Good morning, and welcome to Sanuk from me as well. Maybe I'll ask you. You mentioned that you think FactSet is well positioned to become the leading AI-powered financial intelligence platform. And then, you know, you talked about significant work ahead of you and alluded to new competitive dynamics. So maybe expand on that a bit. Sort of where do you think the focus will be for you over the next couple of years, and, you know, where do you think the end state is? For you?

Sanuk Viswanathan: Thank you, and thank you for the question. I appreciate it. And, thank you everyone for the warm welcome. On AI, clearly, it is the biggest opportunity in front of us. We have already several products in the market, and as you've heard in our call so far, we are seeing real traction, and we are really leveraging those to make competitive displacements that are adding value and adding to the growth rate. What I meant by the work ahead is this is an accelerating and really dynamic space. There is a lot of technology change. There are a lot of competitive dynamics as in new competitors startups, traditional competitors all in an AI arms race.

So my focus in the next several weeks and months is gonna be spending significant time with our clients to understand their top priorities, how they are transforming their own workflows, and spend tons of time with teams internally that are on product evolution and looking at our roadmap and understanding how we are meeting our client demand.

There is a fair amount of work to be done here understanding our infrastructure, understanding our technology architecture, and how it will integrate with our clients. But I am encouraged by what I've seen in just the last few days. Just within the last week, I have seen some really exciting projects and some products that I think you will also be excited when they come out in the coming weeks and months.

Operator: Our next question comes from the line of Ashish Sabadra with RBC Capital Markets. Your line is now open.

Ashish Sabadra: Thanks for taking my questions, Sanuk. Let me add my welcome and congratulations as well. Just wanted to parse the strength that we are seeing in wealth, obviously, very strong momentum, really good, displacement of incumbents. But as we think about growth going forward, how do you think about more 7-figure deals there? And as well as the ability to add more through improved attach rate at existing clients? Thanks.

Sanuk Viswanathan: Thank you, Ashish. I will ask Goran to add in a in a minute with all the more recent sort of conversations that he's been having. But as you know, I've just, you know, most recently been in my previous roles, very deeply ingrained in what's happening in wealth management. And I'd just start off by saying that the secular trends in the industry are all in favor of continued growth for FactSet. When you think about how a wealth manager thinks about their business, there is the ongoing activity of building the book and growing new business, where there is an increasing application of analytics and AI in the business development workflows.

And then there is the business of managing the existing book of business really efficiently and continuing to add value to clients and continue to improve their portfolio performance, where, again, we have a strong presence with our adviser desktops and all the tools that we bring to bear, and I see only ever-increasing demand for high-quality analytics that will add value to the advisers. Goran, Ashish,

Goran Skoko: You know, I would say I think our opportunity is demonstrated by our success in the quarter. We had, you know, our strategy has been land and expand. I think we had the $2.07-figure expansion deals in the quarter, both in terms of upselling our, you know, data as well as upselling into, you know, the into additional departments in addition to advisers. That will continue. You know, we see that as a significant opportunity for an opportunity opportunities for AI solutions exist within wealth management, and we're taking advantage of some of them. There's still large 7-figure deals and larger for us in the market in addition to that. Geographic expansion, for prospecting tools.

So Wealth will continue to be our growth driver for years to come.

Operator: Our next question comes from the line of Kelsey Xu with Autonomous Research. Your line is now open.

Kelsey Xu: Hi, good morning. Thanks for taking my question. I was just wondering if you could maybe talk a little bit more broadly about FactSet AI strategy, both on enhancing internal efficiencies as well as driving better client engagements. And in light of this, maybe also talk a little bit more about the Motes off access workstation in light of all of these emerging AI companies and startups. I know you previously guided towards 30 to 50 bps ASP growth in '25 from GenAI products. So just wondering actual results, how does that compare to guidance, and if you're expecting the same type of growth from AI products in 2026? Thanks a lot.

Sanuk Viswanathan: Thanks, Kelsey. It's a really big expansive question. So I'll start off by just giving my general thoughts on how I see the strategy and what I've been learning in the last few days. And then Helen's gonna cover your question around, you know, what the impact has been, and maybe Goran, you can highlight some of the ways in which AI is translating into competitive wins. So if I come back to and I have to draw on my experience over the last decade or so where I've been, working to implement various iterations of AI on a very large scale, in my previous roles.

And one of the things, that I and everybody else always underestimated was how complex it was to capture the value that the promise was always high. But the process it takes to put models into production in highly regulated environments that our clients have is not easy. It's really complex, and it core comes down to the implementation, the quality of implementation, the quality of the data, how reliable a partner you are working with.

And you can see that those trends starting to emerge now as you talk to enterprise CTOs and CIOs, who are trying to implement and data officers who are trying to implement this. So this is this is why I'm personally incredibly excited about the opportunity for us because of the open architecture design and the fundamental sort of infrastructure that FactSet has built over the last ten years which enables us to partner much more actively and aggressively with both clients, who want to bring in their proprietary data, FactSet's own data and insights, as well as the fly join up with third-party data that a client may find valuable.

So I see incredible opportunity for us given that dynamic. Helen?

Helen Shan: Yes. Thank you, and thanks, Kelsey. So I wanna keep in mind that, one, we launched many of our products in January. So it's been terrific to be able to see some of that go through. A lot of this has to do with adoption. But to answer your question more specifically, when we gave the guidance of 30 to 50 basis points, I'm really happy to say that we, were exactly in the middle. So we were able to accelerate growth, right well right in the middle of the range. And, right within our expectations. I think that it's important also to note that those are stand-alone products. Those are monetized products.

But quite frankly, so much of our conversations with clients is around both the, strategy and the roadmap how that influences their decision.

So I'll let Goran talk more because when you talk about the impact AI has, it's much broader than just the, monetized products that we've been able to bring to market. So off of a PowerPoint page and onto actually, being used by clients.

Goran Skoko: Thanks, Helen. You know, I just wanna highlight a couple of things. I have to take the opportunity if you really had a fantastic sales quarter and, you know, lots of momentum going into 2026. And, you know, AI was a significant contributor to that. About 60% of what we have sold from, you know, in terms of our AI tooling and content came in Q4. And I think that really bodes well for what is ahead of us and the opportunity that Sanuk spoke about. So in addition to discrete sales of that we have referenced, in the numbers, our GenAI tooling and strategy has been pivotal in many of our renewals and new deals.

About 35% of our renewals in the quarter mentioned our GenAI tooling and strategy as a contributor to their decision to select FactSet in head-to-head competition with others. So, you know, I think we are very happy with the progress and the momentum that these tools are bringing to us. We had three very large banking renewals in the quarter, and all three mentioned, again, our AI tooling as one of the key as one of the key points in their decision to go with FactSet as well. I hope that answers your question.

Operator: Our next question comes from the line of Shlomo Rosenbaum with Stifel. Your line is now open.

Shlomo Rosenbaum: Hi, Sanuk. I wanna join the others in welcoming you and I just wanna put this out in terms of I know it's early on, but there's been a lot of investment in AI and it seems like it's very exciting and embedded in a lot of products and a little bit of growth also coming from that. Do you feel that this investment is going to materially accelerate the growth rate for FactSet?

Or do you think that with everything going on in the industry, realistically, all these investments that are going on are really to kind of maintain your market position of where you are in, you know, realistically, that's what you need to do to just kind of hold on to what's going on. So trying to figure out is there gonna you know, is this just an increased investment that's necessary to keep you there? Or are we gonna see a return to some kind of material growth I know it's early on, but you must have thought about this before you took this job.

Sanuk Viswanathan: Thank you. Thanks for the question. It is one of the important questions that every provider is asking themselves when it comes to what is happening with the AI-led transformation. My perspective is these transformations go through different phases, and I think we are still in a relatively early phase of embedding AI in our clients' workflows. And at this phase - and FactSet has done incredibly well to get out ahead of competitors - it is a discovery phase. And during this phase, clients are experimenting with lots of different ideas and tools. There are, you know, a lot of evolution in the dynamics of the technology itself. And it's going to take some time to settle down.

Usually what happens then is there is a breakout phase that is well ahead of us in this context, where the winners start breaking away from the rest because the solutions are clearer, there is more client adoption. And when it really starts coming to committing real budgets, there is more conviction. And I think we are way early in the AI adoption cycle still for that and especially in our client base, which are, again, highly regulated where the data and the outcomes, have to be incredibly precise. And we are going to see that evolution curve ahead of us.

So to your question, I think my perspective is, what I see is the investments underway right now. It is allowing FactSet to be a leader in client conversations. It is allowing for FactSet to have the right kind of progressive dialogue around where we see the market going. And I think a lot of this is going to translate into ultimately the real big winning products that are ultimately gonna come out. And I have been personally quite excited about what I've seen in the last week as I've gotten deeper into it, and I've been understanding the product roadmap.

And there are some really exciting products and projects underway that will add a lot of value to our clients. I don't know if Helen or Goran want to add anything to that in terms of your perspectives?

Helen Shan: No. I think you've captured it well. I think the fact that we have some of these green shoots from the investments we already made is what gives us greater comfort and confidence of why we are investing more in those same areas of data workflow and AI. And those are the winning combinations and I see that helping us grow going forward.

Operator: Our next question comes from the line of Jason Haas with Wells Fargo. Your line is now open.

Jason Haas: Hey, good morning and thanks for taking my question. I'm curious if you could talk about what trends you're seeing in regards to bank hiring. And then we've heard this idea that the banks are already pretty fully staffed. So even if we see a continued rebound in IPO and in M and A activity, that the banks don't need to hire a lot more because they're fully staffed. They're scared to be good comment on that thought as well. Thank you.

Sanuk Viswanathan: Thank you for that question. I'm gonna just make a couple of general remarks about what I see in banking, and then I'll pass it on to Goran to give a bit more color from especially the recent large wins that you've seen. What I see is the ongoing trend in banking is there's a continued strategic convergence across the full spectrum of banking activity from commercial banking, corporate banking, all the way to investment banking and deal-making. There is a lot more of an integration that is happening at the universal banks in bringing these capabilities together and being able to go to market and go to their clients with a joined-up approach.

There is a huge focus on CRM convergence. And bringing together their ability to understand their clients which has not been easy, especially for the largest institutions. And there is a continued focus on banker productivity, particularly, obviously, enabled by some of the advancements that we see in AI. So there is a fair bit of technology dollars that is being committed that I've at least in my experience over the last, you know, couple of decades, this is the highest intensity of technology and intensity of data and analytics being applied in banking. That I've ever seen, and I think that's we are just at the start of that. Goran?

Goran Skoko: I will just add, you know, I think so hiring in Q4 was a bit better than expected for us. So we did see contribution from banking hiring in our results. It was material, but it was it was better than we had, you know, than we had modeled throughout the year. We are also seeing similar trends carry into Q1, so there is improved hiring in the sector. And I would also just wanna highlight one thing. This is the area where some of our productivity tools and some of our GenAI, you know, related tools or AI-related offerings are really receiving the, you know, the most attention and think we expect momentum in that regard as well.

Thank you.

Operator: Our next question comes from the line of Surinder Thind with Jefferies. LLC. Your line is now open.

Surinder Thind: Thank you. Helen, this question is actually for you. Can you help us maybe better understand some of the internal productivity initiatives here and what you're expecting, if there's anything that you can quantify? It seems that there's a narrative out there that AI should be, you know, a material beneficiary to margins and yet in the near term, we're seeing all of this increased investment. So is this an idea where maybe you can do a lot more rather than doing, I guess, the same amount with maybe lower resources? Like, how do we think about that trade-off?

Helen Shan: Thanks, Surinder, for your question. Oh, go ahead. And what it means for headcount on a go-forward basis.

Helen Shan: Yeah. Sure. No. Thank you for that. No, you're absolutely right. There is a narrative out there of material change in terms of cost. I think from our perspective, there's a couple of things you need to get right. In what we've been able to do for CallStreet, in a more efficient way, more in a speedier way, quite frankly, now we do need to invest. Every company has - as a finance person, we always talk about the death of Excel, but I'll wait to see when that happens. But, quite frankly, do still have a lot of manual pieces out there.

So my view is that you'll see a slowdown in, employee growth, but a lot of our improvements will be about redeploying that talent. Then we're gonna see that translate into greater productivity and higher output, which will drive top-line growth. So that's where I see a lot of the efficiencies come from.

Operator: Our next question comes from the line of Craig Huber with Huber Research Partners. Your line is now open.

Craig Huber: Great. Thank you and congratulations as well. That was up 23% to 24% each of the last two calendar years, up about twelve year to date here. Probably can't do a whole lot better than that. You do cite that the environment's been holding your revenue growth back and it's been up four to 5% organically, as you know, the last six quarters here, looking at my model. What has to change in the environment out there in order to get accelerated organic revenue growth aside from this AI that you're chatting about here?

What else can you point to here to help give us some confidence that the organic growth will accelerate above this 4% to 5% trend you've had the last six quarters? Thank you.

Sanuk Viswanathan: Thanks, Craig. Let me just make a couple of remarks, and then I'll suggest Goran gives a little bit more color based on our client conversations. I think beyond AI, my perspective on what's happening in the industry, right, across all of the major clients that we serve, is there is a continued increase in the use of analytics through and through the trade life cycle, the portfolio lifecycle, the client lifecycle. And I think that AI is an accelerant to that. It was always happening but AI is driving an acceleration in that trend. Which leads to the demand for services such as FactSet, where we see growing opportunity across the board.

And that's, again, starting to be, reflected as you saw in this last quarter. Goran?

Goran Skoko: So, you know, just maybe to continue on that note, you know, so we did significantly in the quarter from - we keep talking about GenAI, but our exchange data feeds, our price reference data feeds, you know, our managed services offering. All of those will contribute and we do not have to see a significant change in the market conditions to achieve what's ahead of us, but, you know, we have plenty in our toolbox to accelerate our growth.

Helen Shan: To add to what both Sanuk and Goran have said. If I think about the trends that are out there, there are two pieces in particular. We have clients who are upgrading their own tech stack. They're moving from what quite frankly, on our platform, less than 30% of them have even moved to the cloud. That is a natural place for clients to reconsider who they wanna use going forward. So that's one piece of it. The second is quite frankly, the need for more data. And not just data for the sake of data, data that's quality, that's information and that is all concorded.

I think that's reflected this year where we have double-digit growth in our data ASV. And so I think that is a harbinger for what we see going forward. So between and the third piece, which Goran touched on, is that as things become more sophisticated, managed services is a great way for clients to be able to then essentially focus on what they're best at, which is generating alpha, and then moving towards using us where we're able to use our own technology, our AI, to be able to do a lot of the middle office pieces in a more efficient manner. I would look at three things.

Improve the change in the tech stack, focus on tech stack changes, and greater data adoption.

Operator: Our next question comes from the line of Toni Kaplan with Morgan Stanley. Your line is now open.

Toni Kaplan: Obviously, at the midpoint of the guide here, you're below 35%. My question is, do you think that 37% to 38% is off the table so a little bit of a longer-term margin question in terms of this goes? Thanks.

Helen Shan: Thanks, Tony. Appreciate it. Look. Let me talk a little bit about what's underneath to the medium-term guidance. We're not making any changes to that. And when we do, we'll obviously come back and talk to that. But in the investments that we're making, which we believe will drive that top-line growth, was the data expansion, the wealth the PLC for what we call the portfolio life cycle. That's a driver on top-line. And then, of course, as Sanuk already talked about, everything we have is gonna have AI, so that's gonna be a driver.

That's meant to help on the top-line growth. Two-thirds of that is coming into those buckets. The other third, which I've been calling structural, is really around things that will help on the efficiency side, or give us the operating leverage going forward. For 2026 alone, we have about a 100 basis points lower professional fees, and lower third-party content. I sort of think about those going forward as we're going to get better and better on the productivity front. We're going to get leverage both on that piece and driving our top line. So I'm gonna stick with talking to 2026. I understand your question. But that's how we're thinking about it at this moment.

Operator: Our next question comes from the line of Scott Wartsol with Wolfe Research. Your line is now open.

Scott Wartsol: Great. Good morning, guys. And, Sanuk, welcome. Just want to stick on the investment and margin side of topic here. And, Alan, just wondering if you can maybe talk about, especially on the sort of growth investment side, if there are any specific payback periods you are sort of looking for when you guys are making these investments?

Helen Shan: Yeah. No. Thank you for that. So I'm gonna answer that in a couple of different ways. To how we think about with our acquisitions as well. And then there are other things that we expect quicker returns. That's how we measure the speed with which we can cover our costs.

Operator: Our next question comes from the line of Peter Knutson with Evercore ISI. Your line is now open.

Peter Knutson: Hi. Thanks so much for taking my question. I'd love to ask, touching on an earlier question, about your outlook for pricing and competition in the current market landscape?

Helen Shan: That is something that we go across the board. We believe what we're providing our clients is appropriately priced. We've actually not seen too much change, as you referenced, over the year. There's been a little bit on new business. It really depends on certain firm types. I would say of the various ones, we've managed to be able to maintain within a 5% range of our price realization. So we're not doing more discounting than we have before. We've actually seen an uptick in Q4 in terms of new business.

So both in terms of ASV and in terms of a number of deals, and our annual price increase, which is what we've done in the past, was in line. And so we're not assuming anything different in our 2026 outlook. Thank you.

Operator: Our next question comes from the line of Manav Patnaik with Barclays. Your line is now open.

Manav Patnaik: Thank you. Good morning and welcome, Sanuk as well. Just Sanuk, maybe just for you, just curious on your thoughts on capital allocation and particularly in this AI race that you talked about, whether deal making is going to be a focus to you. And, Helen, I just wanted to follow up quickly. You mentioned a few times investments in cyber. I was just curious.

Sanuk Viswanathan: Thanks, Manav. It's a huge amount of energy going into the innovation in the company. And historical acquisitions that have been made are also well integrated. So in the coming months, I'm going to investigate this, obviously, in much more detail, both in terms of hearing what client priorities are and how they are shifting. And that will ultimately optimize the approach in terms of organic versus inorganic growth.

What I'd like to add, though, is that we are prudent with our investments and with capital allocation right now. And we'll continue to do that in the way that FactSet has done with the capabilities that are already in place here at FactSet.

Helen Shan: Hey, Manav. Your question on the cyber front. So, yes, that is meant to invest in AI, that's an important piece of it. And when you have over 6 million in portfolio on the asset management side and over 15 million portfolios, and growing on the wealth side, we, want to make sure that we are providing the best we can in terms of security. So that's why that is part of the driver of our focus. Thank you.

Operator: Our next question comes from the line of George Tong with Goldman Sachs. Your line is now open.

George Tong: Hi. Thanks. Good morning. I'd also like to extend a welcome to Sanoak. So your fiscal 2026 guidance for organic ASP growth of around 5% at the midpoint, points to a deceleration from growth you saw in fiscal 2025. What are the key factors contributing to it?

Sanuk Viswanathan: Let me start, and then I'll hand over to Helen. You know, it's been a busy week and a bit. And with the leadership team and the board and the guidance reflects our view of the business today. The dynamics that we see, in the marketplace, and balancing that with our commitment to our long-term growth. So you know, we clearly see continued growth opportunities in the areas that we've already talked about. Whether it's wealth, data solutions, and frankly, in quite a lot of the other places that I've seen. And we are continuing to make investments where we see opportunity. I'll be sharing more about long-term vision and opportunities and strategy in the coming months.

Helen, would you like to add anything?

Helen Shan: Sure. No. Happy to do that. And thanks for your question, George. As noted on, in the script, I mean, we are taking a more conservative approach to our guidance exactly for the reasons that Sanuk just talked about. It is not due to reduced confidence. I'll ask Goran to talk about the pipeline, but the midpoint is conservative in some cases because we know that there are longer sales cycles. We know that we can tell from And, and then we know there are some headwinds as it relates to quite frankly, we feel very good about where we are.

The fact that we are above our midpoint for this year and just to keep us all in line, last year we were at a range of 90 to one forty, and we're up this year. So I think it just reflects a conservative, and we're gonna do everything we can to beat it.

Goran Skoko: So I would just say that we expect to execute in the range we provided. Our pipeline is a bit improved year over year. You know, it's early in the year, so it's a little bit difficult to talk with certainty, but we do see improvement. So, you know, that is one of the main trends.

George Tong: To touch again on AI. I hear your conviction on the medium-term opportunity and your belief in your competitive position. But I'm curious I guess, one, how you'd characterize the adoption of AI in the financial sector at this early stage? And then maybe conceptually, how important is it allow you to be a little bit more deliberate with your innovation strategy?

Sanuk Viswanathan: Really important question. And the AI adoption curve with our clients. When I look at the products that we have out in the market, and as I get to learn more about what's, you know, it is being developed on the inside as well as what clients are demanding, it's I think they are, really, very poised to add value to our existing products, services, and solutions with our clients. Whether it's in areas like sentiment analysis, automated portfolio commentary in the buy-side, synergistic analytics, these are all aligned with the kinds of solutions that we offer traditionally to our client base. So I think the competitiveness of these products, I believe, is high.

We are going to see continued traction with it. And the investments that we are making and what I see in the pipeline where we are today.

On to your question around the adoption curve and do we need to be first mover, I believe there is a, there is a trade-off between being too early and the opportunity to leapfrog competition. And this is a fine balance to strike. And I'll be working with the teams to, you know, get that balance as right as we can going forward.

Sanuk Viswanathan: Thank you. Thank you, everyone, for joining the call today. As, we begin fiscal 2026. It's an exciting time. Strategic investments are driving strong momentum across the business as we execute on what matters most to our clients. As I stated earlier, my commitment to positioning FactSet as the leading AI-powered financial intelligence platform for our clients. I look forward to meeting many of you over the coming weeks and days. Operator, that ends today's call.

Operator: This concludes today's conference. Thank you for your participation. You may disconnect.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,059%* — a market-crushing outperformance compared to 189% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of September 15, 2025

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has positions in and recommends FactSet Research Systems. The Motley Fool has a disclosure policy.