Financial data firm FactSet profit forecast misses estimates amid cautious spending

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(Reuters) -FactSet on Thursday forecast annual adjusted profit below Wall Street estimates amid ongoing macroeconomic uncertainty that has made investors and clients more cautious about discrentionary spending such as data and analytics.        WHY IT IS IMPORTANT       Uncertainty over trade policy and a recent slowdown in the U.S. labor market have prompted firms to delay upgrades, trim subscriptions and scrutinize costs, weighing on demand for financial data and tools.

BY THE NUMBERS

FactSet said organic annual subscription value (ASV), the next 12 months’ revenue potential from subscription services, rose 5.7% to $2.37 billion in the Fourth quarter ending August 31.

It forecast annual revenue between $2.42 billion and $2.45 billion, compared to analysts’ average estimate of the $2.45 billion , according to data compiled by LSEG.

However, FactSet forecast 2026 adjusted diluted EPS is expected to be in the range of $16.90 to $17.60, lower than analysts’ expectation of $18.26.

On an adjusted basis, the company earned $4.05 per diluted share in the quarter, compared with $3.74 per share from the same period last year.

Its revenue rose 6.2% to $596.9 million.

CONTEXT

FactSet provides financial data and tools to help investors analyze markets, manage risk, and track portfolios. Buy-side clients, including institutional asset managers, wealth managers, asset owners, hedge funds, and corporate clients – account for 82% of organic ASV.

MARKET REACTION  

 Shares of the Norwalk, Connecticut-based company fell nearly 3.5% to $324.28, before the bell. The stock has lost nearly 30% so far this year, compared with a 12.2% gain for the benchmark S&P 500 index.        

(Reporting by Prakhar Srivastava in Bengaluru; Editing by Tasim Zahid)