FactSet’s FY2026 report shows a business still growing subscriptions and organic ASV, but with materially weaker GAAP profitability as compensation costs and one-time charges absorbed much of that growth. Cash generation improved, which suggests the earnings pressure was more cost-driven than demand-led 8-K.
FactSet Research Systems Inc · Fiscal FY 2026 (year ended 31 Aug 2026) · Reported 30 Sep 2026 · US
Key figures
Million USD | FY 2026 | FY 2025 | Change |
|---|---|---|---|
Revenue | 2,476.26 | 2,321.75 | +6.7 % |
Operating income | 699.96 | 748.30 | -6.5 % |
Net income | 533.48 | 597.04 | -10.6 % |
Diluted EPS | 14.57 USD/share | 15.55 USD/share | -6.3 % |
Operating cash flow | 822.20 | 726.26 | +13.2 % |
Operating margin | 28.3 % | 32.2 % | -4.0 pp |
Net margin | 21.5 % | 25.7 % | -4.2 pp |
Figures in USD, as reported. Margins are computed from the reported lines.
Revenue growth stayed intact, with subscription momentum and AI supporting ASV
Revenue rose 6.7% to $2.48 billion in FY2026, while organic revenue also grew 6.7%, indicating the year’s top-line growth was not acquisition-led on the figures provided 8-K. The more telling operating indicator was organic ASV, which increased 7.0% or $168.2 million to $2,568.2 million at August 31, 2026, with management highlighting a record increase in organic ASV and saying AI solutions ASV added in fiscal 2026 more than doubled year over year 8-K.
The release ties that growth to commercial execution as much as product demand: annual ASV retention remained above 95%, enterprise relationships deepened, and average renewal contract length increased by 30% in Q4 8-K. That suggests the core franchise is still winning longer-duration commitments even as the income statement shows heavier cost pressure.
The real change was margin compression, not a slowdown in sales
Operating income fell 6.5% to $700.0 million even as revenue grew 6.7%, and operating margin dropped to 28.3% from 32.2% a year earlier 8-K. Management attributed the GAAP margin decline primarily to higher employee compensation costs, mainly driven by one-time restructuring charges, ASV-linked incentive plans and one-time CEO compensation costs, only partly offset by revenue growth 8-K.
The adjusted figures show the pressure was not only one-off. Adjusted operating income rose 1.4% to $855.3 million, but adjusted operating margin still fell to 34.5% from 36.3%, which management said was mainly due to higher compensation expense from ASV-linked incentive plans and technology expenses 8-K. That makes this report less about weak commercial performance than about a cost base that expanded faster than revenue.
EPS was hit by operating costs, while adjusted EPS still advanced
Net income fell 10.6% to $533.5 million and diluted EPS fell 6.3% to $14.57 in FY2026 8-K. Management said GAAP diluted EPS was mainly driven lower by higher operating expenses, including non-recurring items, partially offset by revenue growth and a lower share count 8-K.
Company-defined adjusted diluted EPS increased 6.1% to $18.01, again helped by revenue growth and a lower share count 8-K. The gap between declining GAAP EPS and rising adjusted EPS reinforces that this was a year where underlying commercial growth remained positive, but reported profitability was pulled down by restructuring and other compensation-related items that investors will need to judge for persistence.
Cash flow improved, which supports the quality of the franchise
Operating cash flow increased 13.2% to $822.2 million, while free cash flow rose 14.6% to $707.5 million. However, much of the improvement reflected lower working capital outflows, which decreased from $105.7 million to $11.6 million. The stronger cash flow therefore should not be interpreted as evidence of improving underlying profitability. 8-K. That is a better outcome than the declines in net income and operating income, and it argues against reading the weaker earnings as a deterioration in the business model’s cash-generating capacity 8-K.
Capital returns remained aggressive, with $808 million returned to shareholders during fiscal 2026, including more than $179 million in Q4 through $138 million of share repurchases and more than $41 million of dividends 8-K. The report does not say whether FY2026’s elevated compensation and restructuring costs will recur at the same level, so the key unresolved issue is how much of this year’s margin compression should be treated as temporary versus structural.
What to watch next
Whether organic ASV growth near the FY2026 rate of 7.0% can continue as management points to momentum in AI and data solutions 8-K.
Whether operating margin stabilizes after FY2026 GAAP margin fell to 28.3% and adjusted operating margin fell to 34.5% because of compensation and technology costs 8-K.
Whether investment in cybersecurity and resiliency raises costs further, as the 10-K says the company must devote additional resources to enhance systems, controls and resiliency against evolving threats 3.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.