For those of you who don't know me, my name is Manav Patnaik. I'm Barclays' Business and Information Services analyst. I really appreciate you all being here. You know, we're very happy to have here with us, Linda Huber, who's the CFO of FactSet. I know many of you have seen and met Linda in her many different roles before, but, you know, this is the best one so far, right Linda?
Absolutely.
Yep. Linda, just to start, you know, I think FactSet has been around for a long time, but a lot has changed. You know, for the lack of a better word, let's just say there's a FactSet new co almost. Just to set the stage, how would you describe to the audience what FactSet is?
Sure. FactSet is a leading or the leading data and analytics provider. We feature an open platform. We also sell data feeds and a lot of other products with excellent service, mainly to support the financial services industry.
Got it. Then just to follow up on that, you know, the way you break out the ASV in your three main categories, can you just remind us of those three categories and, you know, how much of it as a percentage of mix it is?
Sure. we have three different what we call workflows. We do report by geography, but the three different workflows. Research and Advisory is the largest part of the business, followed by the Analytics and Trading business, and then the CTS business, Content and Technology Services part of the business. Wealth would be another part, which is actually part of Research and Advisory. It splits out, R&A is about 37%, A&T is about 31%, CTS, and wealth split the remainder, sort of 15% each, if that adds up correctly.
Got it. You know, one of the things that's changed over the last couple of years, is the growth algorithm. You know, you, you guys did a great job of laying that out on the Investor Day, but just again, just what is that new growth algorithm, and how does that break down between, you know, price and volume components?
Sure. It's important that everyone understands that FactSet's medium-term goals for the top line would be 8%-9% growth. That's a pretty significant change from historical sort of 5% view that the company had experienced before. To do that, we're looking at a combination of about 1/3 new logos or new customers for FactSet, 1/3 expansion of existing customers that already use FactSet, and 1/3 coming from price. The important thing there is price realization and much better discipline around our pricing bundles or modules to make sure that as we deal with price and provide great value for our clients, that we're actually able to realize that price, and we've been doing much better on that journey.
lots of thanks to Helen Shan, my predecessor as CFO, who's now head of revenue and doing a great job for us.
Got it. I wanna come back and touch on each of the ASV buckets as well as these growth areas. First, I think just to set the stage, you know, you've been in your role now just around two years, if I got that right?
Little under two years.
Little under two years. Perhaps when you first came in, what was the opportunity that you saw at FactSet that you could bring value to?
Sure. Really saw three challenges that could perhaps be addressed and really help the company be much more successful. The first, and pretty typical corporate finance view would be that the capital structure needed to be optimized. FactSet had no public debt, no public debt rating, and in fact, had a revolving credit facility when we arrived. With the CUSIP acquisition, we were able to, I think, bring the capital structure to a more optimized point. That acquisition cost $1.925 billion. We put in place $1 billion of public debt. We did that in February of 2022, split evenly $1 billion between a five-year piece and a 10-year piece. Fortunately, the blended rate on that's 3.25%. Couldn't do that today.
Okay.
The timing was fortunate. Our capital structure is now an investment-grade capital structure, which is helpful to us should we need to go to the public markets again. Capital structure, I think in an optimized place. The second challenge was really to get, you know, pricing for value correct. As I just spoke about, we've actually been able to bring much greater discipline to the pricing effort, kind of get everyone in the sales force on the same page. In the second quarter, we talked about our price realization. Dollar amount was about $31 million, which was $10 million higher than in previous years. We're making good progress in price realization.
That number was for the Americas for the first half of the year, and of course, not every client has pricing changes every single year. Price realization in a much better place. The third is margin. Important that FactSet think about increasing its adjusted operating margin as a way of demonstrating efficient and effective management. We've talked about 50-75 basis points of margin expansion on average per year. This year we're guiding to 34%-35% adjusted operating margin. We're making our way up perhaps a bit more slowly than some would like, but we are working on getting that margin to a better number.
Got it. Let's go in reverse order to follow up. On the margin side.
Mm-hmm
... you know, I think that was one of the complaints, before you joined with FactSet was, you know, why margins are always, you know, flattish or even down. What was it that you changed about the dynamic, that's allowing you to commit to this consistent margin expansion every year?
I think we've had very good focus on our four main cost buckets. Part of it is just having a plan and explaining to the organization what we're all trying to shoot for. I think we've done a pretty good job with that. We divide the cost buckets into four. Starting with the least important is third-party data costs. Those have only gone up 3%, which is really pretty good given the inflationary environment. That's careful management of data that we rent from others. The second would be real estate. FactSet is working on a hybrid model. 70% of our employees are working hybrid, so we don't need every square foot of office space that we have had.
Last year we took a charge for $60 million in real estate. In the second quarter we talked about coming this year we'll take another $15 million-$20 million of real estate charge. That will total about $80 million of real estate write-downs, which is very important that we have the right amount of office space for the employees that we have. Next comes the technology budget. That one has continued to move up a little bit. We are a technology company. We're investing a lot, but we're largely complete with our cloud journey now, and we've looked at what we're doing. You need some cloud capability and some on-premises capability. Cloud mostly for customers, but on-prem works just fine for our internal usage.
Kate Stepp, our CTO, has helped us lead an effort to save $20 million over five years, bringing some things back on premises. That's a very big help. We expect technology, though, to still be 8%-9% or 9.5% of revenues. And then our people costs is our biggest cost bucket. We have to watch that obviously quite carefully. We have 2/3 of our employees offshore. Last year we worked hard to make sure we're paying everyone appropriately, particularly the engineers, in a really competitive engineering environment. Last year our bonuses were quite strong. This year might be a little bit more back to normal. We talked about our bonus pool going from $115 million down to $100 million-$105 million on the second quarter call.
That adjusts, depending on the type of year that we're having. Close management of all four cost buckets and, I think, you know, some really good thinking and careful tracking as to what we're doing with those buckets.
Got it. You know, just on the bonus payments, last year you said you made, you know, that extra amount, which is why I think you came in towards the high end of your guidance range versus, you know, people expecting you to come above. I just wanted to give you an opportunity just to level set, you know, going forward, you know, the margin ranges for this year and going forward, how do we think about that as, you know, in terms of, you know, your target setting there?
Yeah. We intend to meet our targets. It's possible we could do a little bit better this year, 2023. We'll have to see how that goes, how the rest of the year plays out, keeping in mind our fiscal year end is August 31st. For us, it's coming a little bit more quickly than many companies. As I said, 34%-35% adjusted operating margin this year, we wanna get that to 35%-36% as we exit 2025. Of course we would hope to do better, but we'll see. Good focus on the margin, though.
Got it. And just sticking on the margins as well, I mean, you know, talking about a downturn playbook-
Mm-hmm
I mean, you know, you'd obviously be the one in control, in charge of maintaining that margin and EPS when that happens. Can you just talk about the flexibility that you have and how that would play out?
Sure. We've already implemented some steps of downturn playbook, making sure T&E travel is limited to essential travel mainly by the sales teams. We've worked on that lever. Also as I talked about, we've reduced our real estate footprint, which has been quite helpful. The bonus targets will self-adjust if this year is a little bit less great than last year was. Then, you know, there's some other things we can do in terms of looking at staffing and where we have our employees deployed. We are going to, though, protect our investment pools, which that investment pool is about the same size as last year. We're not going to disclose what that is. We just finished our first pass of our investment effort, and a lot of exciting ideas.
We sort of run an internal Shark Tank-like process. 15 great ideas brought to the management team, and we'll see where we decide to invest the money.
Got it. you know, to the second part you had brought up around pricing.
Mm-hmm
I guess connected to margin as well, the new pricing power that you guys are exerting, I guess, that definitely helps the margin. Can you talk about the sustainability of that? Is it just because you have inflationary environment where you can do that? You know, what other factors are playing in there?
Sure. I think the environment helps. FactSet will never be the highest pricer in the sector. We are not the price umbrella, as it's called. There are other companies that do that. In fact, that provides a great opportunity for FactSet because companies are very cost-conscious, and they're looking for ways to be able to reduce their data and analytics spend. FactSet has a service called Blueprinting, where we look at the tech stacks of all of our customer companies and look at ways that we can fit in better for those companies, perhaps increasing their spend with FactSet, but reducing their tech spend overall. That's worked out, really, very well.
Price realization and the discipline around it is a very important thing, and we think that, you know, there's somewhere in the happy medium there in terms of price increases that will work best for FactSet. That sort of moderate but consistent strategy is one that I've seen work well before, and I think we wanna continue on that path.
Got it. I know the first point you mentioned that you changed is the balance sheet, so we'll get to that a bit later. You know, I think, can you talk about the general influence you've had in terms of, you know, helping run a public company and, you know, the team that you've brought in as well? Like, I don't wanna say revamp, but you have made changes. Can you just talk about the impact that's had on the way the business is run?
Sure. You're, you're very kind, Manav, but no one had appointed me queen of FactSet. In fact, Phil Snow is an extremely effective and very collaborative CEO. I'd note interestingly that FactSet's executive leadership team is half female, which is pretty interesting for this industry. Extremely collaborative and very effective. You know, I think we're all doing this together as very much a team sport. I do have a very strong finance team, and obviously everyone's familiar with Kendra Brown, our Head of IR, a 24-year proud FactSetter. We have great heads of the various finance functions, and we've been able to do really well with the team that we have.
Excellent execution, for example, on the CUSIP acquisition, excellent integration. You know, I think we've done a great job on the balance sheet as well. Tax rate is very effective. All the factors are really pulling together well. I think it has much more to do with a great team than just with me.
Got it. Okay, I wanted to focus a bit on the macros.
Sure.
The first part is just gonna be kind of the customer environment, and then get into a little bit of the data and AI picture as well. On the customer environment, can you just give us a sense of your exposures? You know, there's obviously a lot of questions on regional bank, big bank, IB, hedge fund, but just a sense of what your exposures are first.
Sure. If you start with the banking sector in its entirety, that's 17% of our ASV, not a particularly big number. Most of those numbers, most of that 17%, tends toward the larger global banks, the household names. We have very limited exposure to regional banks, which is helpful. If you think about our main products might be analytics for investment banking and corporate banking analysts, and then also wealth products. Regional banks are not a big exposure for us. Our largest client is only 3% of our revenue, so we don't have great concentration. We did do second quarter guidance on March 23rd, which was four days after UBS acquired Credit Suisse, and a week after Silicon Valley Bank.
We're happy to see that the pressures on the banking sector have abated to some degree, somewhat normalized. We hope with the acquisition of First Republic by JPMorgan that most of that is behind us, we hope. The issue around that was really extending sales cycles. We saw customers sort of stepping back while all of this was going on. Perfectly normal response. Really important to state that the pipelines remain the same. The pipelines are strong. However, just a little bit more hesitance to make those decisions to actually sign contracts. We've seen that banking pressure abate a bit, quite a bit, but now the focus turns to the U.S. debt ceiling and the June 1st, or thereabouts, what Janet Yellen calls X-date, when the U.S. government no longer has cash.
We're very hopeful that this resolves in a constructive way, and we'll hope that we get back to the normal pace for our fourth quarter, which is our traditionally strongest revenue quarter. ASV quarter is the fourth quarter.
Got it. Just to get back on, you know, the abating banking pressures. You know, in the last week or so, we saw Morgan Stanley looking to lay off, Citi looking to lay off, so maybe just. Part one is just, you know, I guess maybe you're not seeing some of that, but the main question is, you know, I think before there was this impression that FactSet was a very headcount-focused business, but it isn't that. If you could just talk about how you would describe the contract structures.
If I could get rid of one urban myth, it would be that FactSet is completely seat-based. That's absolutely not true. Most of our customers are on three-year contracts, and those contracts have longer, quite long 90-day cancellation periods and floors and ceilings. Those contracts remain in place. We have about 96% recurring revenue base. It's a very sticky, consistent business. We're very lucky in that regard. For investment banking, the main thing for us is what the incoming hiring classes look like, and though cuts have been made in headcount at some investment banks. Oftentimes that's pruning in the middle layers, and we'll have to see how incoming classes look. Generally, those classes would probably be similar in size.
You have to recall during the pandemic, many of these institutions didn't do the normal sort of trimming and pruning that they would've done, and that's being done now. That has less impact on us than what happens with the incoming analyst classes.
Got it. Now the one thing that probably does impact you know, is big mergers and shutdowns. I think you said UBS, CS, neither one of those were your 3% customer or whatever. Can you just talk about how we should think about the pluses and minuses when that eventually happens? I don't believe that's in your guidance, but just when that eventually happens.
We've actually thought about that, and we did consider that in our guidance change for the second quarter. If you think about UBS acquiring Credit Suisse, and my first employer was First Boston, which became Credit Suisse First Boston, so an extraordinarily unfortunate moment in the industry. If you think about where UBS will go with that, this is not decided yet, but one would think UBS wants to keep the wealth managers of Credit Suisse. That would be an intact customer base. Secondly, for the investment bankers and others, there's some very strong franchises at Credit Suisse, including the technology group, the healthcare group, the financial sponsors group. All of those, you know, I think would probably continue apace, which is fine.
That is to say that we don't see that the change would be absolutely that dramatic, as that process moves along. That will probably take a year, so we'll see what happens.
Got it. Let's shift to the buy-side part of your ASV, which I guess is 83% of the mix, so definitely the biggest. You know, within that, how much is hedge funds, and is the rest basically long-only asset managers?
Most of it is long-only asset managers. The hedge fund space is still pretty small. Excuse me. I don't have that exact breakout. About 5%, excuse me, is hedge funds. Mostly long-only asset managers.
Got it. You know, in terms of, you know, trying to move from the macro environment that you talked about into this, you know, what's a hot topic out there now, which is around, you know, AI, generative AI specifically, right? Cause next year there's gonna be a deep fake version of me doing the chat with you out here. You know, if-
We're gonna miss you, Manav.
I'll miss this conference too.
Our engineers are already working on duplicating your voice.
All right, good. Perfect.
Just kidding.
Two-part question. First, let's just say, you know, I think most people believe Gen AI will be a big productivity efficiency enhancement tool. You should have that at your benefit. But let's just say it cuts your customer base, you know, by a third or something of that. You know, how do you counter that kind of, you know, impact to the business?
I don't think we see anything that draconian in the customer base, at least we hope not. We like our customers very much.
Okay
... and we like them in human form. I think what we see is a great opportunity to do a couple of things. One is to reduce our content collection costs, perhaps pretty dramatically, and then also secondly, speed to market, very important to increase that. The point is to make AI useful to our clients and to be able to monetize it. You know, we have a bunch of really productive engineers. They're already exploring ChatGPT. The question is, how do we monetize this rather than just asking ChatGPT to respond to what is the meaning of life? You know, we really need to be able to find those commercial uses for it. We've been using AI at FactSet for a long time. We were an early adopter.
An example would be if you look at the MD&A section of a financial quarterly report, when you're looking at causes of change, AI would allow you to extract those causes of change and put them in a table form, which is really useful, rather than wading through all the words. We've been able to do that now for a number of years. FactSet's been an early adopter of AI, and we're now working on a bunch of other ways to bring that to the fore. For me, the holy grail is to reduce the cost of that content collection, and that is a very exciting opportunity on the margin front for FactSet. We're not sure what that looks like yet.
I was in Hyderabad and Manila two weeks ago speaking with our engineering teams about it. There's a lot of interesting work going on. Probably going to take a little bit of time to get that fully developed, but we've got a lot of very excited and focused engineers working on it.
Got it. You know, there's one view that, you know, technology, generative AI, analytics will be maybe commodity's a strong word, but available off the shelf, and so the differentiator's gonna be down to the data and content that, you know, you have proprietary access to. Could you just give us a flavor of, you know, the data set that you referred to earlier? Like, how much of that is, you know, publicly available, proprietary, within walled gardens, however you wanna describe it?
Sure. We have 40 years of data, probably two dozen data sets behind paywalls that are proprietary to us, and then we also lease data as well. We feel that putting AI on top of the most robust, best concorded or connected database is really, really important, and we think that gives us a natural advantage as we move into this AI ChatGPT world. It's going to be a process that requires also very careful quality control. You can't just turn everything over to the bots and have everything run perfectly. We have a lot of transitioning to do. We're working hard to find the best applications, but again, it's to reduce speed to time to market and to reduce content collection costs as first matter.
Got it. The last question, this to transition into your different ASV buckets as well as the CTS, the data feed side of the equation. You know, we heard one theory that, you know, like do you think this will impact your data feed strategy, like giving away your data, you know, selling that data when somebody else can use all this new technology to milk, you know, so much more out of it? Do you think that changes the strategy?
I don't think it does because you can't access the data without working through FactSet.
Okay.
You need a subscription. We work very carefully to ensure that that data is clean and properly concorded, and that's something that is core to our content refinery, which is the most important aspect of FactSet. We wouldn't see that much change. Our CTS business is the fastest growing of our businesses, so we're happy to provide data feeds to users, or we can provide our analytics on top of those data feeds. We're agnostic as to how our customers make use of our products.
Got it. you know, CTS, even in your long-term algorithm, is the fastest growing business. I think low teens was the target.
Yes.
Why is that? What are the structural drivers that's driving that such high growth?
Sure. Just huge demand for data from clients and many clients want to just take that raw data and look for signals in it themselves.
... build their own analytics on top of those data feeds. Others would rather have our analytics on top of data feeds. We're happy to go, again, whichever way clients would like to provide it. The use of just those big data feeds growing very rapidly, as you noted.
Got it. The other area that's growing faster than the overall average is the wealth business that.
Mm-hmm
... alluded to before. You know, can you just talk about what the dynamics there are and, you know, why is? You know, you wouldn't think of wealth being such a high growth business, but it has been for you.
Sure. We've been very lucky in that other firms that have invested less are share donors to us. When we do head-to-head trials and comparisons, we've been able to win in many of those cases. Some of the ones that have been press released would include Bank of Montreal, Royal Bank of Canada, Raymond James, both in the U.S., and in Canada, Bank of America, Merrill Lynch. Back on the data feed side for a minute, we had a very big win with a huge tier one asset manager in the data feed space. We're able to compete across all these different verticals. In the wealth business, generally there'll be trials of us and another provider head-to-head, with employees looking at the capabilities of both products.
We show very well in that sort of situation because we're very flexible. Our workflows fit in nicely to what wealth advisors normally do. You don't need to know a special set of codes. Normal natural language search features, all those kinds of things. Very, very important. We've had one firm say to us that their productivity increased by 20% by using FactSet. We haven't quantitatively proven that quite well enough yet, but we'll take their theory. It's good. We've been very pleased with the wins that we've had with our products. Also on the research front, we've recently won the research department of one of the big bulge bracket banks. We're very proud of the progress that we've made. Moving to cloud early in 2019 was a big bet.
You know, a very dramatic bet for FactSet, $100 million of investment, and it's paid off quite well. Now we find that we're at the forefront and, that's a great place to be.
Got it. Just on the Analytics and Tradings piece, I think I understand the analytics obviously core to what FactSet does, and I think you've talked before you need to just get better at fixed income. On the trading side, what is the strategy there? Is that to try and get more into Bloomberg's area of business or, you know, what is the focus?
Eventually, yes. One of the big focuses now is on real time. To have that tier two and three tick data, we're partnering with BMLL, which is a company which is based here, for level three tick data. That has been a big sale, I mentioned, to one of the very large global asset managers. That real-time product, we have ticker plants in the cloud now, which is a big competitive advantage and highly localized for places like Singapore, where that information has to be kept within its own proprietary cloud. Real time is the first step in that, and yes, we do look to provide more products for people who are more active traders.
Got it. Can you do that competitively with Bloomberg organically, or is that where there will be a little bit focus on M&A as well?
I think we probably will need to combine factors on that, particularly as we look at the fixed income space because FactSet has grown up out of the equities side of the market. We do have quite good fixed income capabilities, but there are a few more things that we can add.
Got it. Just to touch on those buckets of top line growth, you know, the third. We already touched on the pricing piece.
Mm-hmm.
I wanted to touch on the third that you said comes from expansion within existing clients. Can you just talk us through, you know, maybe a few examples anecdotally how that works and what the appetite, you know, there is?
Sure. The statistic we like to say is that 60% of our customers are buying something from each of the three workflow areas of FactSet. We like to think that to know us is to love us. Once clients are comfortable with us and the very high level of client service, they'll try some other products, and it's easier to sell new things to a happy, successful existing FactSet customer. We found that the expand part of the business is very, very important to us. It's going quite well. The sales force is highly trained and directed at firm type, our sales force knows exactly what our clients are doing and how they do it, and can even suggest more efficient ways to handle their workflows.
All that's gone really, really well, and the expansion part is really important. Retention is very important, too. By client, the retention rate is 92%, so it's extremely high and very sticky.
Just on that 92%, you know, your prior companies were more in the mid-90s, is that kind of your level you wanna achieve, or is 92% just part of the industry dynamics too?
I would... We can always aspire-
Mm-hmm
... to do better, Manav, until we get to 100%.
Okay. Fine. Fair enough. The last component, the 1/3 new logo component, I wanna bring in competition into that discussion, you know, what are the specific areas of new logos, maybe it's the industries or client types that you're winning more business from. I presume wealth is a big part of that.
Mm-hmm.
Just some more thoughts around there and how competitive things are out there.
Sure. We're looking to do more with corporates, which is a great place for us to focus our efforts on Deep Sector, and I can talk a little bit more about that in a second. We're looking to do more with private equity and venture capital firms, which we call PEVC. That's a very strong area for us as well. We also sell into the IR functions of various corporates as well, and that's a strong area for FactSet also.
Got it. Maybe that's a good point, 'cause I was gonna get to the Deep Sector investment. Maybe just to put it in context, like the top three areas of investments perhaps that you're focused on, and where does that sit?
Sure. I would probably say, Deep Sector, and then real time would probably be the second one. After that, probably a tie amongst a number of other areas, that we're working on, probably around enhancing that content refinery.
Okay.
Deep Sector is to build out eight different verticals of extremely deep industry specialized knowledge. We're working on this with two global bank clients, so we're in beta process right now. Behind those global banks are a long list of others who are watching to see what we do to see if we can make all of that work. It's one of the biggest content collection efforts ever. It's quite remarkable when you see what we're doing there. That whole collection effort is being aided by AI and XBRL technology. We're moving from financial institutions out to other areas, and so far so good. The accuracy is quite high, and we're very pleased with that. It's really a game- changer, Deep Sector, and we're looking forward to a much bigger reveal as we move forward in time.
What's the timeline for that reveal? You know, you're still in beta you said?
It's probably, for the full view there of everything that's coming, it's gonna take about a year. We wanna make sure that our clients who have helped us with this are very happy and have made a great transition to FactSet, and we're doing all those things in tandem.
Got it. Since you brought up the content collection using AI and XBRL, but you also have a ton of people, you know.
We do.
... in India and Manila doing that. just, you know, rough sense of timeline and opportunity and how that can be a cost opportunity, I guess.
I think we have. I know, because I've been out to meet and speak with everyone. Great engineering teams in both Hyderabad and Manila. We would look to make their work more client-facing and allow them to do, you know, higher value-added development opportunities and more specific customizing for clients. On the cost side, we'll have to see. You know, that's an opportunity that's gonna come over the next few years. To be honest, not quite sure how that's going to play out quite yet, and, you know, we'll work through that, and we'll certainly keep you posted on our earnings calls as to what we're hoping for in that area.
Got it. I said I would save the balance sheet towards the end. We're gonna get to that now. I know it's something you know, you focus on a lot. Maybe just to start with current leverage level. I think last quarter you said you're now back into the buyback market. Just talk about that and, you know, buyback dividend before we get into M&A.
Sure. We've just increased our dividend by 10%. It had been $0.89 a quarter. Now it's $0.98 a quarter. We wanna keep about 30% of that free cash flow going back to the shareholders through dividends. You're correct, we've also reentered the share repurchase market. We have $181.3 million available for share repurchase over the last five months of our fiscal year, so we've spread that about evenly. That's on an automatic plan, so that's all working. We'll look to get another authorization from our board for next year, and we'll talk about that in FY 2024 guidance. Our leverage levels are back to 2x to 2.5x gross leverage, appropriate for an investment grade company like ourselves.
We're going to look to slow down the pay down of our term loan to about half the pace that we had before, which had been about $150 million a quarter, so maybe take half of that. We wanna keep some leverage on the company. We like that 2x to 2.5x . We think it gives us good flexibility and great access to the capital markets at a reasonable price.
Got it. In that context, when you think about M&A, you know, are we talking about more small tuck-ins, medium, or... I think CUSIP was almost perfect timing. You know, you mentioned that before. You know, what's the appetite for larger deals, and what kind of leverage levels would you be comfortable with?
Well, we've spoken to the rating agencies about this. We have a track record of increasing our leverage and then bringing it back down. We could replay that again, but it's very hard to find medium or larger deals that would work well. I think the focus would be on those smaller tuck-ins, mainly in wealth and helping us with content collection. I'm not sure that another deal of CUSIP's size is in the cards in the immediate future. We'll look as the company scales up in size as to what we wanna do, but I think we'll probably look at the smaller size deals for right now. I would rather that they be margin accretive. A lot of what is shown to us is either, you know, pre-margin or, heaven forbid, pre-revenue.
As a CFO, I'd rather pass on some of those.
Got it. Then maybe just to end here, we know we talked about, one of the biggest myths was, you know, seat-based, and you know.
Mm-hmm
... you clarified that. Since you've... You know, I think from the outside, when you were at your prior companies, you've obviously got much more insight into what's going on. What else do you think is misunderstood or underappreciated at FactSet?
Sure. I think FactSet marries incredible depth of data with really amazing customer service capabilities. I think FactSet is still a little bit of a hidden gem in the sector with great growth prospects, margin improvement prospects, and trading at a reasonable price. We're quite excited and really looking forward to the future, powered by AI and the great technology that we already have.
All right, great. All right, we'll leave it there. Thank you so much, Linda, for being here. Thanks everybody as well.
Thank you.