FactSet (FDS) Q3 2026 Earnings Call Transcript

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DATE

Wednesday, July 1, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

• Head of Investor Relations - Kevin J. Toomey Jr.
• Chief Executive Officer - Sanoke Viswanathan
• Chief Financial Officer - Joshua Warren

TAKEAWAYS

• Organic ASV -- $2.486 billion, representing 7.1% year-over-year growth driven by broad-based demand across all regions and client types.
• GAAP Revenues -- $622.9 million, increasing 6.4% primarily due to demand from institutional buy-side and wealth management clients.
• Adjusted Diluted EPS -- $4.53, up 6.1% versus last year reflecting revenue growth and a lower share count, partially offset by increased operating expenses.
• Adjusted Operating Margin -- 34.0%, down from 36.8% in the prior year period due to targeted investments in AI infrastructure and higher performance-based compensation linked to ASV momentum.
• Organic ASV Growth (Americas) -- 7.0%, reflecting consistent performance and deepening enterprise relationships in the domestic market.
• Organic ASV Growth (Asia Pacific) -- 10.0%, representing the company's fastest-growing geographic region.
• Organic ASV Growth (EMEA) -- 5.0%, showing acceleration compared to the prior-year growth rate.
• Organic ASV Growth (Wealth) -- 10.0%, driven by digital transformation initiatives and the onboarding of large broker-dealer clients.
• Organic ASV Growth (Institutional Buy-Side) -- 6.0%, accounting for nearly half of the total ASV book.
• Organic ASV Growth (Deal Makers) -- 9.0%, reflecting strength in private capital and investment banking workflows.
• Free Cash Flow -- $254.0 million, an 11.1% increase over the prior year driven by higher net income and efficient working capital management.
• ASV Retention Rate -- Above 95%, underscoring the durability of long-term client relationships.
• User Count -- 247,000 individual users, representing a 12% increase year over year.
• Technology Workforce Headcount -- Approximately 10% reduction initiated during the quarter, reflecting productivity gains from AI-assisted coding tools.
• Capital Returned to Shareholders -- $629 million fiscal year-to-date, including $506 million in share repurchases and $123 million in dividends.
• Share Repurchases -- 926,370 shares for $203.1 million, completed at an average price of $219.21 per share.
• Quarterly Dividend -- $1.16 per share, representing the 27th consecutive year of dividend increases.
• Fiscal 2026 Organic ASV Growth Guidance -- $130 million-$160 million, with management tracking toward the high end of reaffirmed ranges.
• Fiscal 2026 GAAP Revenue Guidance -- $2.45 billion-$2.47 billion, reaffirmed as the company maintains its current execution trajectory.
• Fiscal 2026 Adjusted Operating Margin Guidance -- 34.0%-35.5%, reflecting the impact of second-half weighted strategic investments.
• Fiscal 2026 Adjusted Diluted EPS Guidance -- $17.25-$17.75, reaffirmed with expectations of reaching the upper end of the range.
• MCP Server Adoption -- 450 clients actively engaged under contracts or trials, with API call volumes growing 13x quarter over quarter.
• AI-Assisted Coding Adoption -- 27% of committed code in participating engineering teams is now authored by AI agents.

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RISKS

• Warren stated, "Margin this quarter was also negatively impacted by nonoperational items, such as our FX hedging program, which went from a gain in Q3 25 to a loss in Q3 26, creating an overall drag of approximately 60-basis points," explaining the non-recurring impact on adjusted operating results.

SUMMARY

FactSet Research Systems Inc. (NYSE:FDS) reported accelerated organic annual subscription value growth and finalized a strategic partnership with Google Cloud to integrate Gemini AI models across its data and analytics infrastructure. Management highlighted a structural shift toward enterprise agreements, which moved contract durations longer as clients increasingly viewed the company as critical AI infrastructure. The company reported the launch of FactSet Intelligence, a three-layered platform providing agentic workflows across buy-side, sell-side, and wealth management segments. Operational efficiency remained a central theme, as management utilized AI-assisted coding to reduce technology headcount while scaling data extraction capabilities across foundational datasets.

• CEO Viswanathan stated, "quarter over quarter, overall ASP growth among clients using our AI solutions was 50% higher than for the rest of the book," illustrating a correlation between AI adoption and wallet share expansion.
• The company expanded its distribution through a Google Cloud partnership that will integrate FactSet financial intelligence directly into Gemini Enterprise and provide access to advanced frontier models.
• Management reported that 90% of the company's top 50 clients now utilize four or more FactSet AI solutions, with 20% of top 100 clients using the Managed Content Processor (MCP) on a paid basis.
• A new capital markets intelligence suite for investment bankers allows users to generate comparable company analysis and deal precedents through natural language emails to AI agents.
• FactSet initiated a 10% reduction in its technology workforce, citing efficiency gains where AI coding agents now author 27% of committed code in specific engineering groups.
• The company reported a transition in its business model as renewals extended average contract lengths by approximately 30% during the quarter while preserving pricing integrity.
• CFO Warren noted that while consumption-oriented pricing for AI offerings is modest today, management expects these activity-based streams to become an increasingly important driver of long-term growth.

INDUSTRY GLOSSARY

• ASV (Annual Subscription Value): The forward-looking revenue for the next 12 months from all subscription services currently supplied to clients.
• ASV Retention: A metric measuring the percentage of the subscription base maintained from the prior year, excluding new business.
• MCP (Managed Content Processor): FactSet's cloud-based server infrastructure that delivers content and analytics via APIs to client workflows.
• Agentic: Refers to AI systems or agents capable of performing complex, multi-step tasks autonomously within a workflow.
• Concordance: The process of matching and linking disparate data points to a single entity or identifier across multiple databases.
• Grounding: A technique used in AI to ensure model outputs are based on specific, trusted datasets to reduce errors or hallucinations.

Full Conference Call Transcript

Operator: Welcome to the FactSet Third Quarter Earnings Call. At this time, participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised, To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kevin Toomey, Head of Investor Relations. Please go ahead.

Kevin J. Toomey Jr.: Thank you, and good morning, everyone. Welcome to FactSet's third quarter fiscal 2026 earnings call. Before we begin, the slides we referenced during this presentation can be found through the webcast on the Investor Relations section of our website at 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 1 hour. To be fair to everyone, please limit yourself to 1 question. You may re-enter 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 2.

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-Ks 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 25 period.

Joining me today are Sanoke Vishwanathan, chief executive officer and Joshua Warren, chief financial officer. I will now turn the discussion over to Sanoke.

Sanoke Viswanathan: Thank you, Kevin. Good morning, everybody, and thank you for joining the call. Q3 performance was strong. With our fifth consecutive quarter of acceleration in organic ASP growth. We grew ASV by 7.1% to $2.48 billion across all regions and client types. Adjusted operating margin was 34% reflecting the investments that we have made this year. Adjusted diluted EPS was $4.53, up 6.1% year over year. Our client engagement and growth trends this quarter show that our 4 foundational strengths of connected data embedded workflows, service excellence, and broad and deep distribution are becoming even more valuable as our clients deploy AI widely. 5 example client wins from this quarter demonstrate the breadth and depth of our solutions.

And the tangible impact of strategic investments we have made in new products such as managed portfolio services deep sector content, and real time data. We won a mandate to deliver turnkey performance risk and reporting managed services to 1 of the largest global sovereign wealth funds. We expanded our engagement with a large global OCIO to provide comprehensive reporting and digital capabilities, wrapped with managed services from our subject matter experts. We signed a 5-year enterprise contract renewal at a major global bank. The scope has increased to include more data consumption, with deep sector content playing a key role.

LPL Financial largest independent broker dealer in The US, that supports over 32 thousand financial advisers, selected our real time data platform to support their cloud native trading application and in today portfolio p and l workflows. We displaced a long standing incumbent to expand our presence at a large global investment manager across their front and middle office, Already a top-20 client seeking to further consolidate their operations with FactSet. Each of these 5 wins represents an existing client expanding their relationship with FactSet underscoring meaningful room to grow, within our current relationships. Last quarter, I shared the 3 priorities guiding a transformation in how we do business. Commercial excellence, productivity improvement, and long term strategy.

This quarter shows tangible commercial and productivity outcomes. And our AI road map taking shape. Consistent with our strategy. First, commercial excellence initiative is resulting in stronger new business growth retention and expansion of ASV. As we roll out better tools, increase conversion at every step, and streamline our processes in marketing, sales, and customer success. We are seeing improvement throughout the sales life cycle. Our new website resulted in more top of funnel demand generation Bounce rates improved by 8%, Engagement increased by 8%. And prospects, marketing qualified leads, and sales qualified leads grew by double digits. In Q3, our pipeline conversion from marketing activity was up 15% year over year.

And win rates for these opportunities improved by 27% with 76% of the resulting ASP coming from new business. The corporates, asset owners and institutional asset management client types were particularly strong. We are rolling out a new AI powered sales enablement to our entire team, targeted at improving the quality of our sales pitches, increasing deal velocity, and improving win rates. Beyond these traditional levers, we are transforming our model for retention and expansion as our clients adopt AI. Q3 was the fourth consecutive quarter of double digit growth in ASV for our data solutions with MCP contributing to the momentum. Over 90% of our top 50 clients are now using 4 or more FactSet AI solutions.

And quarter over quarter, overall ASP growth among clients using our AI solutions was 50% higher than for the rest of the book. Early evidence that our AI adoption is helping drive retention and expansion opportunities. The AI transition is also accelerating the shift in our business model from seat linked contracts to flexible enterprise agreements. That encompass our growing data analytics and workflow capabilities. The majority of ASV renewed in Q3, was in the form of enterprise agreements or renewed for durations of 3 years or more. Average contract term extended by roughly 30% while broadly preserving pricing underscoring the foundational value attributed to FactSet by our clients as they adopt AI.

Second, we are rolling out AI agents streamlining operations, and reducing complexity to generate sustainable productivity improvements and operating leverage. Let me highlight a few examples in engineering, data operations, and client service our 3 largest operating cost centers. In Q3, we scaled AI use across our product and engineering teams. Coding related token use grew 5x quarter over quarter, while committed lines of AI written code grew almost 10x. Coding agents now author 27% of committed code in the engineering teams using these tools. With rollout continuing across the organization. With these efficiency gains, we initiated a roughly 10% reduction in our technology workforce and freed up significant capacity to accelerate strategic product development.

We are embedding AI across the full data operations life cycle from collection through quality assurance. Where we have fully implemented new tools, we have reduced operator touch time for data table extraction by more than 50%. We are now scaling this playbook with clear goals to improve quality, timeliness, and unit cost. In M&A data, we have dramatically reduced turnaround time for deal updates. Within FactSet fundamentals, 1 of our largest datasets, we have consolidated multiple data pipelines into 1, allowing us to redeploy significant capacity and reduce the size of this team by 5%. Our client service teams are seeing early positive results from digitization pilots we are running.

These reduce the need for manual onboarding activities from our consultants enabling them to spend more time on strategic user health and retention efforts. In Q3, approximately 4 thousand bankers used our digital onboarding tools and the capacity unlocked resulted in a 22% quarter over quarter increase in live user interactions by our consultants. This helped drive a 5-point increase in Net Promoter Score among our junior banker population in Q3 building on the momentum from last quarter. We are in the early stages of these efforts, but together, they are aimed at a structural reduction in our cost to serve while improving overall quality.

As we realize the full impact of these productivity initiatives, we expect to see further scale benefits and operating margin improvement. Finally, we are developing our strategy based on a strong foundation of connected data, embedded workflows, service excellence, and deep and broad distribution. These strengths make FactSet a trusted governed platform for institutional finance, and are even more important to our clients as they make the AI transition. As a starting point for our clients, we have launched our AI solutions under the banner of FactSet Intelligence. It consists of 3 layers that accelerate our clients' AI adoption. A trusted data ecosystem governed and optimized agentic infrastructure, and intelligent workflows built for hybrid workforces.

First, a trusted data ecosystem, including FactSet, client and third party data is the fuel for AI. And has to be high-grade to provide the right quality output. FactSet's MCP server, built on a robust ecosystem of content APIs has over 450 clients actively engaged under contracts and trials. API call volume is experiencing rapid growth, With Q3 volumes at 13x the level we experienced in Q2. We expect this to continue as we make more datasets available through MCP. Clients can now access our data through all major FrontierLab platforms, including Anthropic, OpenAI, Google, and Microsoft. Our MCP enables access to high quality, comprehensive, and auditable data sets. Presented through the same endpoints used by our own developers.

The quality of our data delivery through MCP is driving expansion at clients where we are already embedded in high value workflows. For example, we launched our portfolio analytics MCP just last week, bringing our signature portfolio analytics into agentic workflows. Portfolio analytics has long been central to how our buy side clients measure performance manage risk, and meet reporting obligations. And we believe we will unlock significant value for clients by extending these capabilities to agentic use. We are also extending our AI solutions in the data layer to client internal data and third party data. FactSet's unique strengths in entity resolution ontology, and concordance in partnership with Snowflake, Databricks, Google, and AWS.

Position us well to help clients build out their enterprise knowledge graphs. Second, FactSet has governed an optimized agentic infrastructure, Our clients want to curate and optimize multiple horizontal and vertical AI solutions. To meet this demand, we are rapidly rolling out infrastructure to become the integrated agentic platform for our clients. We already support millions of models, and billions of formulas and data points across the nearly 250 thousand users of our workstations every day. Users can discover our agents, soon build, test, and publish their own agents, and even integrate third party agents. All while maintaining the security standards, data entitlements, audit logs, and cost optimization that clients expect and get every day from FactSet.

While the user interface may very well evolve, as agentic workloads take off, we are confident in the value we deliver to our clients. And are already seeing significant client interest in rationalizing various experimental efforts and consolidating their AI implementations with us. Third, intelligent workflows for hybrid workforces. As we roll out agentic capabilities, are working closely with clients to redefine how they get work done with a hybrid workforce of humans and agents. Through the partnership we announced with FinStir in March, we have launched a fundamental transformation in investment banking workflows. With our capital markets intelligence suite of agents.

Senior bankers can now send an email to an agent describing what they need and receive insights and artifacts directly built on current FactSet data, comparable company analysis, and deal precedents. Automatically generated and delivered back. What used to take hours or days now happens in minutes. Freeing up capacity for higher value client workflows and interactions, We are seeing strong early engagement with active or pipeline trials at over 30 of our top 100 banking clients. We will roll out similar capabilities to our buy side and wealth clients in the coming weeks with our institutional research intelligence and adviser intelligence product suites.

We announced strategic partnerships with InSync Analytics, Jynbios AI, and Tiffin AI, to advance these capabilities and supplement our internal agent development road map. Across all layers of FactSet Intelligence, we significant growth opportunity as our clients consume more data, through many new channels, consolidate their agentic deployments with us, and reimagine their workflows with our agentic solutions. To further accelerate our product innovation, announced a strategic partnership with Google Cloud this week. Expanding our distribution through Google Cloud's enterprise channels and unlocking new revenue opportunities. The partnership will focus on 3 main areas. Enhancing FactSet's workstation with Google's enterprise search deep research API, grounding, and other multimodal capabilities, using Google Cloud's AI platform.

These capabilities will supplement FactSet's trusted and connected data and analytics and improve the breadth and depth of our AI enhanced insights. FactSet will bring our financial intelligence directly into Gemini Enterprise, and expand our MCP and agent sharing functionalities. Creating interoperability between the FactSet workstation and Gemini Enterprise. This builds on the previously announced DeepMind deep research collaboration. FactSet will also develop and launch a new generation of agents using the Gemini Enterprise Agent Platform designed to improve efficiency, execution, and decision-making in key client workflows. As AI reshapes financial institutions, FactSet is becoming mission critical AI infrastructure. We are transforming our business model to win in an AI intensive future.

We look forward to sharing our strategy and medium term business plan at our upcoming Investor Day. I would like to now welcome Joshua Warren to FactSet. Congratulations, Joshua, on your first earnings call as CFO of FactSet. He will now discuss our Q3 performance in more detail.

Joshua Warren: Thank you, Sanoke. it is great to be here with everyone this morning. Before getting into the financials, I want to take this opportunity to thank all the fact setters who have made me feel so welcome since I joined in April. I would also like to specifically recognize Helen Shan whose leadership over the last 8 years as CFO and chief revenue officer has put FactSet on firm footing as we embark on a new chapter. This week marks the 30th anniversary of FactSet's IPO, and I am excited to join the firm at this moment.

As AI and agents reshape how information is sourced, synthesized, and acted upon, FactSet is positioned for durable, structural growth that can deliver excellent outcomes for our clients, employees, and shareholders. In our results, I will highlight 3 things. First, our client franchise. Its quality, breadth, and durability reinforce our financial profile. Next, our operating leverage, And finally, our flexible balance sheet and disciplined capital allocation, which support our go forward strategy. Expanding our client relationships drove this quarter's results which I would like to recap.

As of the close of fiscal Q3 at the end of May, our ASV exceeded $2.48 billion, representing 7.1% organic growth, and acceleration by more than 250-basis points over the comparable growth rate in 2025. Revenue was $622.9 million representing 6.4% growth over the previous year. Our adjusted operating income was $211.8 million representing a 34% margin down approximately 300-basis points relative to the comparable quarter in 2025 due to targeted investments to improve operating leverage, marketing, performance related compensation linked to ASV momentum, and adjusted EPS grew 6.1% to $4.53.

FactSet serves clients across over 80 countries, including 95 of the top 100 asset managers, more than 85% of the top 50 global investment banks, and the world's top wealth managers, corporations, exchanges, central banks, and sovereign wealth funds. This breadth gives FactSet meaningful exposure to all major geographies and client types in the financial services industry so we are not dependent on any single market or segment while providing a substantial opportunity to expand wallet share within our current clients. With an average client relationship spanning more than 16 years, and 9 of our top 10 clients measured by ASV having been with us for more than 2 decades, we grow with our clients.

And our longest standing relationships have some of the most exciting opportunities for growth. ASV retention rates above 95% reflect the strength of our client relationships, Those relationships fuel our ASV bookings growth, that provides a line of sight into future revenue. As of last year, ASV no longer includes onetime nonrecurring revenue, such as professional services. Our approach is to embed flexibility within enterprise agreements and importantly secure minimum commitments. These minimums give us a baseline so that we can support new consumption patterns and be rewarded for the value we deliver while preserving the forward visibility that we expect will remain central to our financial model as we deliver more AI solutions to our clients.

Today, most of our recurring revenue comes from fixed subscription and license revenue. A growing portion of our recurring revenue streams are driven by initiatives that are activity based, including workflows that are increasingly mission critical for clients. We are seeing more client interest in consumption oriented pricing particularly for emerging AI enabled offerings. While modest in size today compared to our total ASV, we expect these revenue streams to become an increasingly important driver of our growth over time. These revenue streams introduce a dynamic and growth oriented dimension to ASV 4 forecasting and subsequent revenue flow through that complements the traditional subscription base.

As our delivery model evolves alongside our clients, we expect to review our approach to reporting to preserve transparency, alignment with our go forward strategy. Our organic ASV is a like for like comparison that excludes the impact of foreign exchange, discontinued business lines, and acquisitions that closed within the last 12 months. For the third quarter, organic ASV accelerated to 7.1% year over year an increase of $35 million during the quarter. FactSet's highest ASV growth rate since Q1 24. Growth was evident across all regions and client types, as the world's leading financial services firms continue to choose FactSet as a trusted partner.

Turning to our performance by geography, organic ASV accelerated in each region compared to the prior year. Americas grew 7%, EMEA grew 5%, and Asia Pacific, our fastest growing region, grew 10%. Now turning to our results by client type. The institutional buy side consisting of global asset managers, asset owners, hedge funds accelerated to 6% organic ASV growth. This represents slightly less than half of our overall ASV. Wealth remains our fastest growing category and delivered 10% organic ASP growth. Organic ASV for deal makers grew 9%, This category represents a broad range of clients, including investment banks, sell side research teams, corporates, and private capital firms. Today, this represents nearly 40% of clients less than 20% of ASV.

Those smaller in size are strategically important market infrastructure category saw organic ASV grow 7%. Demonstrating strength across the platform, third quarter revenues grew 6.4% year over year, or 7% on a like for like basis. Adjusted operating margin was 34% for the quarter as compared to 35% in Q2 and nearly 37% a year ago. This reflects a series of deliberate investments that we expect to deliver growth and operating leverage over time. Compensation related expenses typically account for approximately 60% of our total cost base. Our Q3 margin reflects a 7% year over year increase in compensation expenses that were driven by performance incentives linked to the ASV acceleration delivered, not additional headcount.

Because revenue from new ASV bookings is recognized over time, periods of faster ASV acceleration can temporarily compress margins in any quarter since the incremental ASV is not yet reflected in revenue. We will remain long term focused and optimize for profitable growth. Despite the increased overall compensation expense, during Q3, FACS had reduced its overall headcount by approximately 1%, after holding it roughly flat during the first half of the year. While compensation related expenses accounted for approximately 40% of the increase in operating expenses, the majority of the year over year growth came from noncompensation items tied to growth and productivity initiatives.

More than a third of that noncompensation expense increase was technology spending, including to strengthen our core infrastructure, and on token costs. We increased our marketing spending and have a variety of professional services engagements underway to drive future operating leverage. Margin this quarter was also negatively impacted by nonoperational items, such as our FX hedging program, which went from a gain in Q3 25 to a loss in Q3 26, creating an overall drag of approximately 60-basis points. Our earnings per share increased 6% year over year to $4.53 This was driven by higher revenue and a lower share count partially offset by increased expenses and a higher effective tax rate.

While we continue to drive ASV growth, we are focused on capitalizing on our scale to deliver long term sustainable and profitable growth. To that end, we have launched a range of strategic projects aimed at running FactSet with greater discipline and efficiency. Sanoke outlined multiple productivity, but from an operational standpoint, I will highlight 2 items we initiated during Q3 and completed in the past few weeks. We recently rightsized certain engineering teams as we standardize how we build and run software and take advantage of AI assisted coding. Additionally, we entered into an arrangement with RepRisk to support our clients' needs as we discontinued the signals attribution service FAXSA provided following the 2020 acquisition of True Value Labs.

We are continuing to review our product portfolio against appropriate hurdle rates, And while we expect to make additional efficiency improvements, our focus and our investments will remain on serving our clients with excellence. Consistent long term free cash flow generation is a hallmark of our business model and a metric we actively manage towards. Our free cash flow grew to $254 million for the third quarter of fiscal 26 compared with $228 million for the prior period. An increase of 11%. Our disciplined framework prioritizes organic investments in high growth projects, followed by strategic inorganic activity and finally, returning excess capital to shareholders. During Q3, we accelerated our repurchase activity buying back approximately 926 thousand shares for $203 million.

Fiscal year to date, we have deployed over $500 million to repurchase shares. Additionally, we increased our quarterly dividend for the 20 seventh consecutive year. In total, during fiscal 26 year to date, we have returned over $625 million to shareholders through a combination of dividends and repurchases, approximately double the amount returned over the same period last year, demonstrating our continued commitment to delivering shareholder value. Overall, we are committed to maintaining our investment grade rating, which Fitch reaffirmed with a stable outlook this quarter, We continue to assess opportunities for optimizing our debt maturity profile to align with our strategy.

Our balance sheet continues to strengthen with a conservative level of gross debt leverage 1.5x and net debt leverage at 1.2x. Providing capacity and flexibility to support growth. Turning to our outlook. We remain confident in the guidance ranges that were previously set for ASV, revenue, operating margin and EPS. On revenue and EPS in particular, we are tracking toward the high end of those ranges based on our business trajectory. We are pleased with our accelerating ASV growth, and our focus remains firmly on delivering long term value for our clients and shareholders.

During my first 10 weeks here, I have seen that when clients are thinking through and making big decisions about the data powering their platforms, they turn to FactSet as a partner. Our open architecture and partnership oriented approach positions us to deliver excellence to our clients and compounding growth for our shareholders. With that, I will hand it to the operator to open the line for questions.

Operator: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait We ask that you please limit yourself to 1 question. Our first question comes from the line of Ashish Sabadra with RBC Capital Markets.

Ashish Sabadra: Your line is now Thanks for taking my question. Really strong momentum on ASV, and seems like pretty broad based. But as we look at the guidance, the guidance implies a moderation in the fourth quarter. So just wanted to better understand, is that just purely conservatism tougher comps? Or are there any puts and takes that you could flag? Thank you.

Sanoke Viswanathan: Thanks, Ashish. As you have noted, I think it is been a really strong quarter. And, in fact, the momentum continues into Q4. You know, just a month into the quarter, we see that momentum has continued. We continue to see a strong, diverse pipeline of clients. it is broad based. it is across regions, and it is across all of the different client types. And it continues to maintain that growth trajectory that we have seen. It is a tough compare. Just to remind everybody, Q4 of last was our largest quarter ever. And it is a tough compare.

But as we stand today, you know, at the end of June, early July, we are ahead of last year in terms of our bookings. And we also see a pipeline that is as robust as we saw at this time last year. And as you as you can imagine, AI is a tailwind for us. So that is also helping us. Now in terms of reaffirming guidance, you know, we do not change guidance quarter to quarter. And there is a lot to execute ahead of us. There are multiple 7-figure deals outstanding. It will be all down to execution in the next 8 weeks. And, you know, there could be a timing issue there.

And the second thing is, you know, a lot of tons of mid market deals, which we are actually quite excited about because they are faster to close. And AI is very dynamic. So with that, I think we are reaffirming the guidance and reasserting that we are very confident in our delivery. Thank you.

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. Thank you so much. I wanted to talk a little bit more about your AI monetization strategy. So thanks for a lot of the detail that you provided that, you know, 90% of your top 50 clients use, you know, 4+ AI products. And, you know, faster 50% faster ASV growth So just give us some context around that and just to monitor around that. Is it because there is a direct price for the usage of AI? Is it access to more you know, datasets? And then you also talked about, you know, a lot of your clients consolidating their AI workflows.

With you, and are you agnostic as it relates to, you know, whether they are using your MCPs or whether they are using your specific tools that are inside Access Workstation. So sorry. Long winded question, but just would love more context there. Thank you.

Sanoke Viswanathan: Thank you, Faiza. And, you know, lots of questions in there. And we will take a little bit of time to answer that because there is a lot of color in here that we can share. Maybe I will start first with the short term picture on AI monetization and then you know, sort of transition to how we see this in the longer term. At the moment, I think we are maximizing our AI monetization with the lens of maximizing enterprise value. So it is all leading to the growth acceleration in ASV, our increased retention, as well as expansion in our existing clients.

So just to give you a little bit of color, just in this quarter, we saw over 10% of the ASV growth came directly from AI SKUs. And, obviously, there was a much bigger impact than that in the broader ASV growth. As well. Just to give you a couple of client examples, we had, like, 1 of the top 10 literally doubled their data subscriptions with us. Because of AI. And these are multiyear contracts. A top hedge fund grew 6x with us, again, because of our MCP delivery. And at this point, over 20% of our top 100 clients are using MCP on a paid basis. Right?

So these are just some short term statistics giving you the sort of the momentum that we are seeing. But when we think more longer term, and as you referenced I think we see multiple, multiple opportunities, and we see AI as a massive tailwind. To start with, you know, there is been lots of questions about what are our motes. And we are really now starting to see this in evidence. Right? it is no longer a theory. We have a strong moat in our connected data and in our embedded workflows. And we see this as a leapfrog moment for us on a stable subscription base.

Our whole data solutions business that delivered standard data feeds APIs, and also sharing on environments like Snowflake and Databricks is perfectly set up for this. Right? With ASV coming through on AI, we see us shipping faster And we are able to flex all of this into commercial agreements that are not just seed linked, but are true enterprise agreements that has a stable large subscription base and a flexible construct on top of that, which allows us to capture the upside in the future from consumption basis. So that is a little bit of color on the short term and the medium term. And happy to take any further questions on this.

But hopefully, you can see the momentum is picking up. Thank you.

Operator: Our next question comes from the line of Alex Kramm with UBS. Your line is now open.

Alex Kramm: All right. Hey, good morning, everyone. I guess I need to switch over to margins for a second here. I think previously, you made some comments in your guidance, and I do not think you made them today, but that you are actually hoping to get somewhat close to the midpoint of your adjusted operating margin guide. So just wondering with some of the things you have done, some of the things that are a little bit more onetime, like the FX hedge, Is that is that still what you are shooting for, or what are the kind of upsides and downsides to that?

And then I know you are not gonna give guidance for next year, but maybe you can just remind us, I think, there are a few things this year that are somewhat 1 timers, professional services, some infrastructure investments that you had tagged for this year. So maybe just remind us what of those 1 time ish items comes out as we head into 2027, dimensionalize those, please. Thank you.

Sanoke Viswanathan: Thanks, Alex. Yes. As you noted, you know, we came in this quarter, you know, 34% adjusted operating margin. That reflects a combination of things. It reflects the strong investments that we have been making throughout the year. As we have said in prior quarters, those are second half weighted. So you saw the effect of that in the quarter. And the performance incentives we are accruing given the ASP outperformance. We are very happy with the pace of the investments. We are seeing really strong progress both on the growth oriented investments as well as in the foundational investments. Both of which we see starting to deliver operating leverage.

And as you know, we do not manage to a quarterly margin, and we do not guide to a quarterly margin. But, you know, we see significant acceleration in AI and continued opportunities for investment, and we will continue to entertain high ROI investment opportunities as they come along. So with all that said, what I would clearly say is we see a clear line of sight now on margin improvement coming up in the future quarters. That includes some of the things you mentioned. Right? We are still clearly, for this year, focusing on the midpoint of the guide. Right? We still, you know, have confidence in that.

And we are seeing line of sight from all of these initiatives that we think will lead to margin improvement in the coming quarters. I will ask Joshua to, you know, build on that and give a little bit more color on the puts and takes for this quarter and going forward.

Joshua Warren: Sure. Thanks, Alex. Really appreciate the question. Nice to nice to hear from you. To Sanok's point, just on the puts and takes, you know, the biggest single item and, really, frankly, the main dynamic in the in the quarter is timing, specifically around pay for performance, arrangements, not headcount growth. Compensation related expenses was the single biggest related single biggest item in terms of our increased expenses. We start to look at the other items, right, technology spending is our second biggest category. that is a combination of things, including our, you know, increased focus on our core infrastructure, you know, programs related to cybersecurity, you know, ITDR, and also our token spending.

Our token spending has increased year over year, and Sanoke mentioned some of the return that we are seeing on our token spending. With regard to the other category, you know, there is a as you as you may observe, there is a series of other initiatives that we have in flight. We increased our marketing spending. We have professional services arrangements. But what I would say looking forward, you know, taking all of that into, you know, kind of into the soup as the past, looking forward, you know, we see a clear path to expanding our margins.

And part of what we are looking forward to is continuing the momentum that we see in the business And that momentum, you know, ultimately, we feel will position us well both on the top line and on our margins. Thank you.

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

Kelsey Xu: Good morning. Thanks for taking my question and welcome to the call, Joshua. A lot of info services companies have talked about this trend of AI implementation driving accelerated data demands. I was wondering if you can talk a little bit more about FactSet's strategy to monetize on the trend both near term and long term. And in relation to this, how should we think about the incremental revenue opportunities brought by MCP especially in the past you called out some extension of new user persona, and I was wondering if you can tell us a little bit more about that. Thanks a lot.

Sanoke Viswanathan: Sure, Kelsey. I mean, some of it I just covered, I think, in my discussion around AI. And but just to repeat that, right, the short term monetization we see is an acceleration in our ASV growth. Clearly, MCP is a is a real accelerant. We see whenever there are deals that involve an MCP component, more often than not and I would say 90% of the time, we seen contract value improvements. So at the moment, it is playing out in the overall broad ASV acceleration. As we go along, we are going to see more and more discrete AI skews And as I said, more than 10% of the, ASP even this quarter came from that.

Now again, it is too early to kind of draw a trend line from that. But that was from virtually zero last year. And it is certainly growing. Now in terms of your question around user personas, yes, that continues. I think even today of our you know, MCP trials as well as our MCP paid implementations, around 20% of the users of our end endpoints are net new users.

Whether they might be in existing clients or at new clients, but they are net new users, these are new workflows and new workloads that are coming on thanks to our ability to deliver AI deliver data to new AI work And just to remind everybody, we are also available on all the different FrontierLab marketplaces as first class data connectors. And that enables this easy discovery connectivity, and also growing users.

Now the last thing I would add is an important and a key indicator for us is does this translate into broader growth in the in our product suite and product penetration And from what we have seen so far in the last 6 months, whenever there is AI consumption through MCP, it is actually leading to an upsizing of our existing products. Whether they are workstations, whether they are other APIs, whether they are other standard data feeds, there is a multiplier effect on the existing business as well. And if you recollect a couple of quarters ago, I spoke about the AI flywheel effect. It is still very, very early stages.

But we are starting to see that in action. 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. I just wanted to understand the partnership strategy and maybe just part of broader capital allocation as well? I mean, understand all the Frontier Lab partnerships and with a bunch of these other ones that you have announced, which not too familiar with. Just trying to understand the pipeline of, you know, what those you know, what that list looks like and whether these are, you know, step 1 into potentially making some of these deals, or is that not way I should think about this? Yeah.

Sanoke Viswanathan: Thanks, Manav. And, you know, you have spotted the sort of the diversity of partnerships that we have struck. it is a deliberate strategy, and it is consistent with how we have thought about our network and ecosystem historically. As you know, we have always been open architecture. And typically, any M&A we have done, we have had a history of connecting it with other, you know, partners that we actually worked with. And we have the experience. There is a clear understanding of the value creation potential, etcetera. In this cycle, we are very focused on 3 things, which connects back to what I described earlier in my prepared remarks on FactSet Intelligence.

Across each of those 3 layers that we described, there is a lot to be done both at our end, at our client's end, and in terms of integrating the whole ecosystem. So at the data layer, there is a number of initiatives underway to help clients advance their data meshes and to build these enterprise knowledge graphs requires us to partner with, you know, firms like Snowflake and Databricks and the like. Similarly, some of the partnerships that you see at the top of that slide which are, you know, the recent ones that we have announced.

Those help us really accelerate the agentic workflows that we are building that are very focused on user personas, whether it is on the buy side or in wealth And the Google partnership we announced cuts across the whole page, really, because we get a lot of benefits from it immediately. A, in the FactSet workstation, we can infuse Gemini everywhere we can get the benefits of early releases of the most advanced frontier models. We get the ability to get cheaper tokens usage because we get the preferential pricing as part of this contract. And we benefit from, you know, better infrastructure and joint product development and innovation.

So the idea is that we are accelerating product development We are being very prudent in our capital allocation, which Joshua will get into in a second. And we are working very actively to ensure that we are staying at the cutting edge of the market and actually leading the market in many ways. As our clients make this AI transition. Maybe, Joshua, you wanna comment a bit more? Capital allocation.

Joshua Warren: Yeah. What I would add to, Sanoke, what I would add to that is, you know, we are very focused Manav, on operational execution but our capital allocation framework provides really a road map to value creation. So, specifically, what that means is prioritizing the investments that offer the highest risk adjusted returns. So we are very focused on investing in growth, investing in growth means building out the products and solutions that we deliver to our clients.

And then beyond that, you know, we consider all excess uses of free cash flow, whether it is return of capital to shareholders in the forms of buybacks or dividends or you know, you asked about M&A or our partnership strategy in particular. And on that, you know, what I would say just to augment what Sanoke outlined is we intend to be very surgical in terms of how we are approaching our acquisition philosophy. We are at the heart of a robust ecosystem of partners that we work with.

But our approach is really going to be focused on the areas of highest and greatest impact So what is really exciting for me in particular and for all of us at FactSet is because of FactSet's open architecture approach, and because we operate in this reach rich ecosystem, a lot of our inorganic activity, we expect to be derisked. Right? We, are already likely having a technology integration or a client integration with a particular partner that we would work with. So you should expect a pipeline that flows from a lot of the day to day execution activity that we are engaged in. Thank you.

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

Shlomo Rosenbaum: Hi, thank you very much. I want to ask a little bit about the commentary about the 3Q 26 renewals extended the length of contracts by 30% on average. And just want to get a little bit more color in terms of are you trading anything like price to get you know, an extended term? And then also, just with the evolving kind of monetization model, is there any risk of locking yourself into something that might not be ideal a couple years down the line? And I am actually, it is interesting that clients are interested in going out that far given that the models are evolving. And I was wondering what the what the feedback is from that.

Do you think that you may have to open up these contracts later on if something kind of changes? If you can just give a little bit of color on that. And then just Joshua, first of all, I guess, welcome to the company and the call. I just want to noting that not reporting client account, user account, and employee count, is that something that you feel is just less relevant as you kind of assess the company in terms of the metrics driving the business? Thank you.

Joshua Warren: Sure. I will I will yeah. I will I will go first and for the questions. Thanks for the welcome. Maybe let's go let's take your questions in reverse order. In terms of client count and user count, you know, more than happy to share our user, count is up 12%. Year over year. You should expect to see those numbers in our queue that we are filing likely after market today. But what fundamentally, we are committed to and we are committed to giving you the metrics that matter.

So an indication of user counts, you know, tends to be in the long tail and not really flows through to the revenue or profitability that impacts you know, the return that we provide for FactSet. Sanoke, do you want to take the first part of the show?

Sanoke Viswanathan: I mean, I as I said earlier, Shlomo, I am really excited to see the, you know, the transition we are making from just sort of shorter term, you know, maybe seat-based contracts to longer term enterprise agreements that give us a lot of flexibility and give our clients a lot of flexibility. So just to give you a little bit of color on how they are structured, we want to I think the operative word between us and our clients is flexibility. Because it is an uncertain future. I think clients are unclear as to exactly where their own consumption will be. So at the same time, there is a high degree of trust working with us.

So we have been able to parlay that sort of that paradigm, if you will, into structuring these contracts. So the contracts are all value based. And any price improvement that we see is based on the value we deliver. We are I can definitely confirm we are not taking any price compression in return for their contract extensions. Right? As it stands, I think there is a lot of new functionality, a lot of new datasets that we are launching and we are delivering it through more and more new channels.

So we talk a lot about MCP, but our a tremendous amount of our delivery happens directly on the large data meshes, whether it is Snowflake or Databricks or Google or AWS. So we are pretty forward, as you know, and that ability to deliver data to multiple channels and provide lots of new functionality plays into these contracts. And in an AI world right now, there is a lot of value that clients are placing on that. Our flexibility is an important aspect of it. There is a large subscription base to it. And I think we feel very comfortable about that. And there is a lot of provisions for new consumption patterns.

Whether it is in terms of diversity of datasets, or increased volume tiers depending on the type of workloads that clients are experimenting with. We feel pretty good about this transition. We will continue to focus on it. It is still early days. And, you know, we will keep you updated in future quarters. Thank you.

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

Surinder Thind: Thank you. Sanoke, can you maybe discuss a little bit about the commentary around the review of the product portfolio? How expansive is it or how comprehensive is it Is there a certain theme that you are pursuing And then maybe where does M&A fit into that strategy?

Sanoke Viswanathan: Sure. I will touch first from an AI perspective, Surinder, and then you know, maybe expand a little bit to our broader sort of what I would the classical product definitions of who we are as a as a company. So just on the AI world, we should look at the stack that we talked about earlier in the in our prepared remarks. We see us playing across that stack. And positioning ourselves as the AI infrastructure for institutional finance. We see our capabilities and data concordance the quality of the data we deliver, our ability to integrate and mesh with internal and third party data as world class.

And we see that as an essential ingredient as clients build out their enterprise knowledge graphs. So that is it. That first layer of the of the FactSet Intelligence stack. The workstation itself, we view as very much a container. That has a lot of capabilities to it today. That is all desired in this AI world. So it has trusted infrastructure, which is feature rich, It is already baking in all of this trusted data that is positioned to support these new agentic workloads, we have the right entitlements We have the right model libraries. Have the security standards. The UI itself, the user interface, we think is less relevant.

That might very well adapt, and we are very actively adapting it ourselves. Into more of an agentic infrastructure and an agentic user interface. Which is fully infused with the best AI capabilities. We are starting to see the benefits of all of this because as clients are exploring and experimenting with lots of horizontal and vertical AIs, are starting to come back and consolidate it on our own agent tech infrastructure. So product development there we see is the transition from a traditional workstation to a AI native or an agentic workstation. And that then leads to what I talked about in the call earlier, which is brand new workflows fully infused with agentic capabilities.

And we are partnering very actively with clients. And these have to be developed and delivered with our forward deployed engineers as well as forward deployed consulting teams. So that is all in the AI stack. Now let me maybe pivot a little bit to talk about product development. From a different axis, if you will, which is our capabilities in data and analytics. So here, we are continuing to invest and grow, and this is really a big driver of our growth in fixed income analytics. We have always been very strong at it. In our performance analytics, portfolio analytics capabilities.

We are now bringing all of that capability also to the front office and we are winning and taking market share from incumbents there. We are extending our capabilities in private capital, so our private market datasets are some of the fastest growing SKUs, if you will, in data delivery. And as you know, we have spoken about it in prior quarters, We are continuing to invest in deep sector data as well as in real time and pricing and reference data capabilities. All of this is resonating well, and we will continue to invest in it.

So you can see us rounding out both in terms of the vertical of the AI stack as well as across a range of horizontal data disciplines and analytics capabilities. Thank you.

Operator: Our next question comes from the line of Toni Kaplan with Morgan Stanley. Your line is now Hi, good morning.

Yehuda Silverman: This is Yehuda Silverman on for Toni. Just had a quick question on the payback period. I know you previously mentioned 3 years for some of the heavier investments. Just curious if you can update us on if there is any difference in change in the payback period around some of the more recent AI related investments and where we currently stand on the timeline for some of the investments that have been made over the past quarters and years?

Sanoke Viswanathan: Yes. 2 things. We are making investments in a number of different areas. There are investments we have made in improving our sales productivity, our tooling, our, you know, marketing capabilities, our website, etcetera. These are very, very, very fast payback initiatives that payback in a matter of months. And so we are very excited to make those sets of investments. Then there are structural investments that we have to make deep in the core infrastructure of the company. Those generally tend to take longer, but we still believe that they are well in line with what we have said before. Thank you.

Operator: Our next question comes from the line of Andrew Nicholas with William Blair. Your line is now open.

Andrew Nicholas: Hi, good morning. Appreciate you taking my question. I think a lot of the AI discussion is actually centered on the institutional business. But I am curious how you think about any differences in the opportunity, the pace of adoption, the right to win within wealth, Obviously, maybe tiffin.ai and that partnership is part of that. I Joshua, given your background, do you have any additional insights on kind of market positioning and how you see FactSet in that market. But just curious if there is a different any differences in strategy we should be thinking about as to AI in that space versus the rest of your business? Thank you.

Sanoke Viswanathan: Yep. Thanks for that question. And, indeed, I think we are seeing differences in the trends. A lot of our institutional progress is exactly as you pointed out. Very related to the stack that we talked about earlier. In wealth and the broader consumer finance market, there is an exciting opportunity for us both to power up the adviser experience which is certainly going through a transformation, but we still believe we are in early stages of that. And the Tiffen engagement and partnership is very much geared towards improving the experience of advisers, and I will touch a little bit more on that.

The second thing is there is a big opportunity for us and a growing opportunity for FactSet in directly serving the end customer's experience, especially in wealth management. But even more broadly in retail consumer finance. So 2 reasons. Number 1, we have the trusted data, and 2, we are the even in the historical pre AI world, we always had a digital business. That allowed us to reach directly out into clients. For example, some of the largest wealth managers out there their portals their client facing portals are all related to what we, you know, we build and deliver that for them.

The point I wanna get to on wealth is that adviser experience is evolving and it is still at its early stages. 1 of the largest business problems for advisers is how to stay on top of their customer portfolios, market events, and all the analytics associated with it. In order to deliver high quality experiences and improve their coverage ratios. This is precisely where the Tiffen agents will help us because we can marry that up with our market data signals internal data, internal research, deliver high quality adviser experiences.

Joshua Warren: Joshua. I would just add I mean, it will come as no surprise. Clients are in different stages of evolution. Every sector is in a different stage of evolution. Think we are incredibly excited about the conversations that we are having and with regard to the adviser experience really in the long tail, you know, of advisers, you know, particularly into RIAs. There is really a lot of opportunity to almost think about the way advisers do their job differently, and I think FactSet may have a role to play there.

But, fundamentally, you know, across the board, whether it is in wealth, in the sell side, in the buy side, you know, what we are seeing is people are starting to recognize, particularly as more work shifts from humans doing the work to agents doing the work, the quality of the output depends on the quality of the data that is going in. So that creates a real opportunity for FactSet to play a significant role, and that is that is something that I and we are very excited about. 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. Can you unpack the contribution of pricing to organic ASP growth this quarter? And how much it is coming from realized pricing increases versus seat expansion product mix, or a broader workflow adoption as you roll out your AI capabilities?

Sanoke Viswanathan: Sure, John. Thank you for that question. Price increases, as I referred to earlier, we view that in the context of value increase for our clients. And our real focus is on retention and expansion of our of our existing enterprise client base. We do not believe in just an inflationary price increase. Having said that, I think our price increase this quarter was better than what we were able to achieve at the same quarter last year. And that just reflects the continued increase in value and flexibility that we are delivering to our clients. Thank you.

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 questions. Just wanted to circle back to the implied margin cadence for the rest of the year. If I model to the midpoint of your guidance, I am getting like flattish year over year adjusted operating margins versus it was just down over 250 bps or so in fiscal 2. So it is implying, like, nice pretty nice improvement in the in the run-rate growth of expenses there. Was there, like, pull forward of compensation expense from 4Q into 3Q? Is it because you did the headcount reduction, so now the run rate of expenses is lower going forward. If you could just, like, just kind of match up the qualitative commentary.

To what the guidance implies, it would be very helpful. Thank you.

Sanoke Viswanathan: Yeah. Sure. Let me just maybe, you know, address quickly, you know, keeping an eye on the on the time. What I would say is we have a big quarter ahead of us. And, you know, we continue to see strong ASP growth. And we see a lot of momentum in that. So what we have left for ourselves in terms of flexibility in the margin range is that if we continue to outperform on our ASP delivery, and we wanna pay for performance, I think we are retaining the flexibility in the margin range. Thank you.

Operator: Our next question comes from the line of Curtis Nagle with Bank of America. Your line is now open.

Analyst: Great. Thanks very much for squeezing me in. So maybe just talk a bit, for Sanoke or for Joshua, either or. The impact of the higher token costs. You mentioned the margin in the quarter. I think you also mentioned there is an expectation to get high returns. On that spend. Sounds like a Google partnership may help. But just unpack a little more, if you would.

Joshua Warren: Thanks for the question. Appreciate it. You know, tokens are an interesting 1 in the sense that they were not a item that we really thought about in 2025. So all of the token spending is net new, but we treat tokens like any other resource, and we have a series of operational controls around monitoring them, there is a whole regime around developer training, intelligent model routing, so it is the right tool for the right job, you know, budgeting that we have undertaken. Sanoke mentioned the ROI that we are seeing on tokens. So we are very pleased to be growing our investment in them. Thank you.

Sanoke Viswanathan: I would now like to hand the call back over to Sanoke Viswanathan for closing remarks. Thank you, operator, and thank you all for joining us today. Accelerating ASP growth, strengthening commercial performance, and measurable productivity gains are positioning us well for the remainder of the year and beyond. Before I close, I wanna thank every FactSetter for their continued focus and commitment to delivering for our clients. We are executing from a position of strength and we look forward to updating you on our progress next quarter.

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

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