FactSet (NYSE: FDS) targets an adjusted margin of at least 36% in new outlook

What happened

FactSet Research Systems Inc. (NYSE: FDS) set medium-term targets through fiscal 2029 and reaffirmed its fiscal 2027 outlook at its Investor Day.

For holders, the update adds a multi-year yardstick for growth, margins and cash conversion. The one-year outlook did not change.

The company presented in New York City on Nov. 10 and webcast the event. Chief Executive Officer Sanoke Viswanathan said its strategy of connected data, advanced analytics and intelligent workflows positions FactSet to provide trusted AI and expand its use at clients. Chief AI Officer Kate Stepp, Chief Technology Officer Bob Stolte, Chief Revenue Officer Goran Skoko and Chief Financial Officer Josh Warren also presented.

Key numbers

Metric	Latest	Change	Source
Organic revenue CAGR target through fiscal 2029	approximately 6%		SEC 8-K Exhibit 99.1
Adjusted operating margin target by fiscal 2029	at least 36%		SEC 8-K Exhibit 99.1
Adjusted diluted EPS CAGR target through fiscal 2029	approximately 10%		SEC 8-K Exhibit 99.1
Free cash flow conversion target (share of adjusted net income, on average)	more than 90%		SEC 8-K Exhibit 99.1
Fiscal 2027 revenue guidance	$2.6 billion to $2.63 billion		SEC 8-K Exhibit 99.1
Fiscal 2027 adjusted diluted EPS guidance	$19.25 to $19.65		SEC 8-K Exhibit 99.1

Read more: FactSet Research Systems (FDS) company research

The medium-term targets

FactSet calls its four targets its financial algorithm. Organic revenue is to grow approximately 6% a year through fiscal 2029. Adjusted diluted EPS is to grow approximately 10% a year. Adjusted operating margin is to reach at least 36% by fiscal 2029. Free cash flow is to average more than 90% of adjusted net income.

The margin target can be checked against fiscal 2027 guidance. OptimistFi's comparison puts the 36% floor 1.25 percentage points above the low end of the adjusted margin range guided for fiscal 2027. The plan asks for at least that much gain over two fiscal years.

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The fiscal 2027 guidance

FactSet left its fiscal 2027 ranges as they were. It expects revenues of $2.6 billion to $2.63 billion and organic ASV growth of 5.0% to 6.5%.

On a GAAP basis, operating income is guided at $806 million to $840 million, a margin of 31.0% to 32.0%. Diluted EPS is guided at $17.00 to $17.50. Adjusted operating income is guided at $903 million to $925 million, a margin of 34.75% to 35.25%. Adjusted diluted EPS is guided at $19.25 to $19.65.

The adjusted figures leave out $85 million to $97 million, or $2.15 to $2.25 per diluted share, of amortization of intangible assets and other discrete items. They also leave out any non-recurring benefits or charges in fiscal 2027.

Why it matters

OptimistFi has argued that FactSet turns high-retention subscription customers into predictable cash flow, then earns more from AI features. The cash conversion target speaks to the first half of that view. The CEO's focus on expanding trusted AI at clients speaks to the second. The update strengthens the case.

The targets are guidance, not results. FactSet says forward-looking statements are not guarantees and that actual results could differ materially. Cash conversion is an average, not a yearly commitment. The margin and EPS goals are adjusted measures.

FactSet also says it cannot reconcile the medium-term non-GAAP measures to GAAP. Some required items are outside its control or cannot be predicted without unreasonable effort.

What's next

The next test is FactSet's next quarterly report on Form 10-Q. Revenue and margins that track the reaffirmed fiscal 2027 ranges would support the new targets. A shortfall would weaken them.

The Investor Day replay and presentation materials stay available at investor.factset.com through Nov. 10, 2027.

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