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FactSet Research Systems Down 0.2% in Revenue for Q1 2010

Financial information and analytical applications vendor FactSet Research Systems has experienced a difficult first quarter to fiscal 2010, with revenues down 0.2% compared to the prior year. Despite the market downturn, the vendor has been investing in its business via the launch of a new platform and has now gone from offering data integration services to offering its own data feeds.

In September, FactSet also announced the release of its newest financial software platform, which consolidates data and analytics, previously spread across multiple applications, onto one interface. “We are pleased with the adoption rate of both our proprietary content and new platform,” says Phil Hadley, chairman and CEO of the vendor. “We successfully released a new platform this quarter and early client acceptance metrics are very strong.”

The vendor is hopeful that the next three quarters of 2010 will prove more profitable than this one: for the quarter ended 30 November revenues were US$155.2 million, down 0.2% on the same quarter the previous year. However, operating income for the first quarter increased to US$54.0 million, up 5% from US$51.3 million in the same period of fiscal 2009 and net income rose to US$36.1 million as compared to US$35.6 million a year ago.

Annual subscription value for the vendor’s data in the US for the quarter was US$420 million and for its international operations it was US$201 million. FactSet seems to have performed better in the non-US markets overall, with US revenues down 1% in total and non-US revenues up 1%.

The vendor has experienced a number of changing faces this year, not least of which was the departure of the vendor’s former president and chief operating officer Michael DiChristina in August this year. DiChristina exited the building and was replaced by ex-chief financial officer Peter Walsh.

Employee count as a whole, however, has gone up in total by 300, 90% of which is due to the expansion of FactSet’s proprietary content operations. With this data content expansion in mind, in June, the vendor signed an agreement with Data Explorers to integrate Data Explorers’ short selling analysis with the market information FactSet provides through its platform. The aim was to provide users with greater transparency on short seller activity, allowing them to factor Data Explorers’ data into the modelling tools and fundamental data provided via FactSet.

FactSet will be focusing this year on marketing itself as a data vendor to both potential partners in the market and to financial institution clients. Should they achieve success in this endeavour, next quarter’s revenues may look a great deal healthier.

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