FDS
$354.59
Factset Research Systems
($1.37)
(.38%)
Earnings Details
3rd Quarter May 2020
Thursday, June 25, 2020 7:00:00 AM
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Summary

Factset Research Systems Beats

Factset Research Systems (FDS) reported 3rd Quarter May 2020 earnings of $2.86 per share on revenue of $374.1 million. The consensus earnings estimate was $2.44 per share on revenue of $377.5 million. The Earnings Whisper number was $2.48 per share. Revenue grew 2.6% on a year-over-year basis.

The company said it expects fiscal 2020 earnings of $10.40 to $10.60 per share on revenue of $1.485 billion to $1.490 billion. The company's previous guidance was earnings of $9.85 to $10.15 per share on revenue of $1.49 billion to $1.50 billion and the current consensus earnings estimate is $10.00 per share on revenue of $1.49 billion for the year ending August 31, 2020.

FactSet Research Systems, Inc., provides integrated financial information and analytical applications to the global investment community.

Results
Reported Earnings
$2.86
Earnings Whisper
$2.48
Consensus Estimate
$2.44
Reported Revenue
$374.1 Mil
Revenue Estimate
$377.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

FactSet Reports Solid Results for Third Quarter 2020

NORWALK, Conn., June 25, 2020 (GLOBE NEWSWIRE) -- FactSet ("FactSet" or the “Company”) (NYSE:FDS) (NASDAQ:FDS), a global provider of integrated financial information, analytical applications, and industry-leading service, today announced results for its third quarter ended May 31, 2020.

Third Quarter Fiscal 2020 Highlights

  • Revenue increased 2.6%, or $9.6 million, to $374.1 million compared with $364.5 million for the same period in fiscal 2019. The increase is primarily due to higher sales of analytics, content and technology solutions (CTS) and wealth management solutions. Organic revenues grew 2.6% to $375.3 million during the third quarter of fiscal 2020 from the prior year period.
  • Annual Subscription Value (ASV) plus professional services was $1.52 billion at May 31, 2020, compared with $1.45 billion at May 31, 2019. The organic growth rate, which excludes the effects of acquisitions, dispositions, and foreign currency movements, was 5.0%. The primary contributors to this growth rate were higher sales in FactSet's wealth and research workflow solutions and a price increase in the Company's international region. Please see the “ASV + Professional Services” section of this press release for details.
  • Operating margin increased to 32.5% compared with 32.2% for the same period last year. Adjusted operating margin improved to 35.5% compared with 34.0% in the prior year period primarily as a result of reduced employee-related operating expenses due to the coronavirus pandemic.
  • Diluted earnings per share (EPS) increased 11.0% to $2.63 compared with $2.37 for the same period in fiscal 2019. Adjusted diluted EPS rose 9.2% to $2.86 compared with $2.62 in the prior year period primarily driven by an improvement in operating results.
  • The Company’s effective tax rate for the third quarter decreased to 15.0% compared with 18.6% a year ago, primarily due to an income tax expense in the prior year related to finalizing the Company's tax returns with no similar event for the three months ended May 31, 2020
  • FactSet increased its quarterly dividend by $0.05 per share or 7% to $0.77 marking the fifteenth consecutive year the Company has increased dividends, highlighting its continued commitment to returning value to shareholders.
  • FactSet updated its annual outlook for fiscal 2020. Please see the “Annual Business Outlook” section of this press release for details.
  • The Company announced changes to its Board of Directors including a new chair, two new members, and the retirement of two current members. Please see FactSet's press release dated June 24 and its Form 8-K filing on June 25 for more details.

“We had a strong third quarter and executed well in challenging circumstances,” said Phil Snow, FactSet CEO.  “I am inspired by the efforts I see across the Company as FactSetters go above and beyond to support our clients and each other. The steps we have taken position us well to finish our fiscal year on target as we continue to evaluate and solve for evolving industry needs.”

Key Financial Measures*

(Condensed and Unaudited)Three Months Ended 
 May 31,May 31, 
(In thousands, except per share data)20202019Change
GAAP revenues$374,083 $364,533 2.6%
Organic revenues$375,336 $365,807 2.6%
Operating income$121,640 $117,240 3.8%
Adjusted operating income$133,380 $122,795 8.6%
Operating margin32.5%32.2% 
Adjusted operating margin35.5%34.0% 
Net income$101,216 $92,265 9.7%
Adjusted net income$110,085 $102,056 7.9%
Diluted EPS$2.63 $2.37 11.0%
Adjusted diluted EPS$2.86 $2.62 9.2%

* See reconciliation of U.S. GAAP to adjusted key financial measures in the back of this press release

“Our ongoing operational discipline and execution resulted in a solid quarter," said Helen Shan, FactSet CFO. "We continue to deliver on both top line and earnings and remain committed to our three-year investment plan. I am very pleased with our overall performance, particularly in our ability to drive ASV and navigate steadily through a volatile market."

Annual Subscription Value (ASV) + Professional Services and Segment Revenue

ASV at any given point in time represents the forward-looking revenues for the next twelve months from all subscription services currently supplied to clients and excludes professional services fees billed in the last 12 months that are not subscription-based. Professional services are revenues derived from project-based consulting and implementation.

ASV plus professional services was $1.52 billion at May 31, 2020. Organic ASV plus professional services was also $1.52 billion at May 31, 2020, up $72.2 million from the prior year at a growth rate of 5.0%. Organic ASV, which excludes the effects of acquisitions, dispositions, and foreign currency movements, plus professional services, increased $14.1 million over the last three months.

Buy-side and sell-side ASV growth rates for the third quarter of fiscal 2020 were 4.8% and 5.6%, respectively. Buy-side clients accounted for approximately 84% of organic ASV while the remainder is derived from sell-side firms that perform mergers and acquisitions advisory work, capital markets services, and equity research. Supplementary tables covering organic buy-side and sell-side ASV growth rates may be found on the last page of this press release.

ASV from the Americas region was $931.5 million, increasing 5.0% over the prior year period's $887.6 million. Americas revenues for the quarter increased to $231.0 million compared with $227.0 million in the third quarter last year. Excluding the effects of acquisitions and dispositions completed in the last 12 months, the Americas revenue growth rate was 1.8%. ASV from the EMEA region was $411.9 million, increasing 3.7% over the prior year period of $397.3 million. EMEA revenues were $105.4 million compared with $102.5 million from the third quarter of fiscal 2019. Excluding the effects of acquisitions and dispositions completed in the last 12 months and foreign currency impacts, the EMEA region revenue growth rate was 2.8%. ASV from the Asia Pacific region was $150.4 million, increasing 8.9% over the prior year period of $138.1 million. Asia Pacific revenues were $37.7 million compared with $35.1 million from the third quarter of fiscal 2019. Excluding the effects of acquisitions and dispositions completed in the last 12 months and foreign currency impacts, the Asia Pacific revenue growth rate was 7.4%. Segment ASV does not include professional services, which totaled $24.5 million at May 31, 2020.

Operational Highlights – Third Quarter Fiscal 2020

  • Client count as of May 31, 2020 was 5,743, a net increase of 55 clients in the past three months, primarily driven by an increase in corporate and wealth management clients. The count includes clients with ASV of $10,000 and above.
  • User count increased by 2,199 to 131,095 in the past three months, primarily driven by an increase in wealth advisors and buy-side research users.
  • Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 89%.
  • Employee count was 10,065 as of May 31, 2020, up 7.5% over the last twelve months primarily driven by hiring as part of the  Company's three-year investment plan.
  • Net cash provided by operating activities decreased to $151.0 million compared with $159.8 million for the third quarter of 2019. Quarterly free cash flow decreased to $139.9 million compared with $148.3 million a year ago, a decrease of 5.7%, primarily due to timing of certain international tax payments.
  • Capital expenditures decreased to $11.0 million, compared with $11.4 million a year ago, primarily due to reduced facilities spend.
  • A regular quarterly dividend of $29.0 million, or $0.77 per share, was paid on June 18, 2020, to holders of record of FactSet’s common stock at the close of business on May 29, 2020.
  • FactSet announced that it will provide financial, non-financial, and benchmark data to the Government Pension Investment Fund (GPIF) of Japan. FactSet will deliver over 20 content sets as part of GPIF’s introduction of its new Index Posting System. The Index Posting System will enhance GPIF’s overall fund management by efficiently collecting a range of information to facilitate more extensive and effective index analysis.
  • The Company won Best EMS Solution at the Markets Media Market Choice Awards, as well as Best Client Reporting Solutions at the WealthBriefing Asia Awards.
  • The Company released its third annual Corporate Social Responsibility Report, which covered the fiscal year ending August 31, 2019. The report highlights FactSet’s recent global achievements in the communities it serves.

Share Repurchase Program

FactSet repurchased 46,689 shares of its common stock for $12.4 million at an average price of $266.09 during the third quarter under the Company’s existing share repurchase program. Additionally, on March 24, 2020, the Board of Directors of FactSet approved an increase of $220 million to the existing share repurchase program. Including this increase, as of June 25, 2020, $288 million is available for share repurchases.

Annual Business Outlook

FactSet provided its outlook for fiscal 2020 on September 26, 2019 and has updated this outlook today.  Given the risk factors, uncertainties, and assumptions discussed below, particularly the ongoing uncertainty surrounding the duration, magnitude, and impact of the novel coronavirus pandemic, FactSet’s actual future results may differ materially from these expectations. 

Fiscal 2020 Expectations

  • Organic ASV plus professional services is now expected to increase in the range of $60 million and $75 million over fiscal 2019. The change in the anticipated range reflects the current expected business impacts resulting from the coronavirus pandemic.
  • GAAP revenue is now expected to be in the range of $1,485 million and $1,490 million
  • GAAP operating margin is now expected to be in the range of 30.0% and 30.5%.
  • Adjusted operating margin is now expected to be in the range of 33.0% and 33.5%.
  • Annual effective tax rate is now expected to be in the range of 15.5% and 16.5%.  
  • GAAP diluted EPS is now expected to be in the range of $9.60 and $9.80. Adjusted diluted EPS is now expected to be in the range of $10.40 and $10.60

Both GAAP operating margin and GAAP diluted EPS guidance do not include certain effects of any non-recurring benefits or charges that may arise in fiscal 2020. Please see the back of this press release for a reconciliation of GAAP to adjusted metrics.           

Conference Call

The Company will host a conference call today, June 25, 2020, at 11:00 a.m. Eastern Time to discuss its third quarter results. The call will be webcast live at FactSet Investor Relations. The following information is provided for those who would like to participate:

U.S. Participants:833.726.6487
International Participants:830.213.7677
Passcode:2889655

An archived webcast with the accompanying slides will be available at FactSet Investor Relations for one year after the conclusion of the live event. The earnings call transcript will also be available via the FactSet workstation or web. An audio replay of this conference will also be available until July 2, 2020 via the following telephone numbers: 855.859.2056 in the U.S. and 404.537.3406 internationally using passcode 2889655.

Forward-looking Statements

This news release contains forward-looking statements based on management's current expectations, estimates, forecasts and projections about industries in which FactSet operates and the beliefs and assumptions of management. All statements that address expectations, guidance, outlook or projections about the future, including statements about the Company's strategy for growth, product development, revenues, future financial results, anticipated growth, market position, subscriptions, expected expenditures, trends in FactSet’s business and financial results, are forward-looking statements. Forward-looking statements may be identified by words like "expects," "believes, " "anticipates," "plans," "intends, " "estimates, " "projects," "should," "indicates," "continues," "may" and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in FactSet's filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K and quarterly reports on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to:  the ability to integrate newly acquired companies, clients and businesses; strains on resources as a result of growth, the volatility and stability of global securities markets, including declines in equity or fixed income returns impacting the buying power of investment management clients; the ability to hire and retain qualified personnel; the maintenance of the Company's leading technological position and reputation; failure to maintain or improve FactSet’s competitive position in the marketplace; fraudulent, misappropriation or unauthorized data access, including cyber-security and privacy breaches; failures or disruptions of telecommunications, data centers, network systems, facilities, or the Internet; uncertainty, consolidation and business failures in the global investment banking industry; the continued shift from active to passive investing, the negotiation of contract terms with vendors, data suppliers and landlords; the retention of clients and the attraction of new ones; the absence of U.S. or foreign governmental regulation restricting international business; the unfavorable resolution of tax assessments and legal proceedings; legislative and regulatory changes in the environments in which FactSet and its clients operate; and the potential adverse impact on our business of global public health epidemics, including the current coronavirus pandemic. Forward-looking statements speak only as of the date they are made, and FactSet assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

About Non-GAAP Financial Measures

Financial measures in accordance with U.S. GAAP including revenue, operating income and margin, net income, diluted earnings per share and cash provided by operating activities have been adjusted.

FactSet uses these adjusted financial measures both in presenting its results to stockholders and the investment community and in its internal evaluation and management of the business. The Company believes that these adjusted financial measures and the information they provide are useful to investors because they permit investors to view the Company’s performance using the same tools that management uses to gauge progress in achieving its goals. Investors may benefit from referring to these adjusted financial measures in assessing the Company’s performance and when planning, forecasting and analyzing future periods and may also facilitate comparisons to its historical performance. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Organic revenues exclude the effects of acquisitions and dispositions completed in the last 12 months and foreign currency movements in all periods presented. Adjusted operating income and margin, adjusted net income and adjusted diluted earnings per share exclude both intangible asset amortization and non-recurring items. The Company believes that these adjusted financial measures better reflect the underlying economic performance of FactSet.

The GAAP financial measure, cash flows provided by operating activities, has been adjusted for capital expenditures to report non-GAAP free cash flow. FactSet uses this financial measure both in presenting its results to stockholders and the investment community and in the Company’s internal evaluation and management of the business. Management believes that this financial measure is useful to investors because it permits investors to view the Company’s performance using the same metric that management uses to gauge progress in achieving its goals and is an indication of cash flow that may be available to fund further investments in future growth initiatives.

About FactSet

FactSet (NYSE:FDS | NASDAQ:FDS) delivers superior content, analytics, and flexible technology to help more than 131,000 users see and seize opportunity sooner. We give investment professionals the edge to outperform with informed insights, workflow solutions across the portfolio lifecycle, and industry-leading support from dedicated specialists. We're proud to have been recognized with multiple awards for our analytical and data-driven solutions and repeatedly ranked as one of Fortune's 100 Best Companies to Work For® and a Best Workplace in the United Kingdom and France.  Subscribe to our thought leadership blog to get fresh insight delivered daily at insight.factset.com. Learn more at www.factset.com and follow us on Twitter: www.twitter.com/factset.

FactSet
Media & Investor Relations Contact:                                  
Rima Hyder                                                                           
+1.857.265.7523                                                    
rima.hyder@factset.com

     
 

Consolidated Statements of Income (Unaudited)
    
 

 
Three Months EndedNine months ended
 May 31, May 31,May 31, May 31,
(In thousands, except per share data)2020 20192020 2019
Revenues$374,083   $364,533  $1,110,521   $1,071,068  
Operating expenses      
  Cost of services170,703   163,832  511,878   495,716  
  Selling, general and administrative81,740   83,461  257,560   248,885  
  Total operating expenses252,443   247,293  769,438   744,601  
       
  Operating income121,640   117,240  341,083   326,467  
Other expense      
  Interest expense, net(2,211)  (4,377) (8,003)  (13,046) 
 Other (expense) income, net(289)  521  (2,090)  255  
Income before income taxes119,140   113,384  330,990   313,676  
       
Provision for income taxes17,924   21,119  47,131   52,413  
Net income$101,216   $92,265  $283,859   $261,263  
       
Diluted earnings per common share$2.63   $2.37  $7.36   $6.73  
Diluted weighted average common shares38,481   38,993  38,548   38,807  
               


 
Consolidated Balance Sheets (Unaudited)
 
   
 May 31,August 31,
(In thousands)20202019
ASSETS  
  Cash and cash equivalents$457,707 $359,799 
  Investments22,606 25,813 
  Accounts receivable, net of reserves151,398 146,309 
  Prepaid taxes42,250 15,033 
  Prepaid expenses and other current assets34,468 36,858 
  Total current assets708,429 583,812 
   
  Property, equipment, and leasehold improvements, net136,655 119,384 
  Goodwill688,484 685,729 
  Intangible assets, net127,207 133,691 
  Deferred taxes 7,571 
  Lease right-of-use assets, net254,391  
  Other assets32,539 29,943 
  TOTAL ASSETS$1,947,705 $1,560,130 
   
LIABILITIES  
  Accounts payable and accrued expenses$80,048 $79,620 
  Current lease liabilities29,225  
  Accrued compensation50,114 64,202 
  Deferred fees58,725 47,656 
  Dividends payable29,188 27,445 
  Total current liabilities247,300 218,923 
   
  Long-term debt574,309 574,174 
  Deferred taxes15,502 16,391 
  Deferred fees8,885 10,088 
  Taxes payable26,816 26,292 
  Lease liabilities276,019  
  Deferred rent and other non-current liabilities5,916 42,006 
  TOTAL LIABILITIES$1,154,747 $887,874 
   
STOCKHOLDERS’ EQUITY  
  TOTAL STOCKHOLDERS’ EQUITY$792,958 $672,256 
   
  TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$1,947,705 $1,560,130 


   
 

Consolidated Statements of Cash Flows (Unaudited)

  
 Nine months ended
 May 31,May 31,
(In thousands)20202019
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income$283,859  $261,263  
Adjustments to reconcile net income to net cash provided by operating activities  
  Depreciation and amortization41,333  43,943  
  Stock-based compensation expense28,372  24,135  
  Deferred income taxes7,230  1,294  
  Loss on sale of assets166  195  
  Changes in assets and liabilities, net of effects of acquisitions  
  Accounts receivable, net of reserves(5,091) 3,112  
  Accounts payable and accrued expenses10,400  (4,783) 
  Accrued compensation(14,154) (23,672) 
  Deferred fees9,856  4,826  
  Taxes payable, net of prepaid taxes(27,088) (2,232) 
  Other, net11,530  (2,757) 
  Net cash provided by operating activities346,413  305,324  
   
CASH FLOWS FROM INVESTING ACTIVITIES  
Purchases of property, equipment and leasehold improvements, net of proceeds from dispositions(62,909) (32,906) 
Purchases of Investments(2,736) (8,180) 
Proceeds from maturity or sale of investments4,199  11,543  
  Net cash used in investing activities(61,446) (29,543) 
   
CASH FLOWS FROM FINANCING ACTIVITIES  
Repurchases of common stock(171,005) (158,294) 
Dividend payments(81,438) (75,769) 
Proceeds from employee stock plans65,323  78,926  
Repayment of debt  (575,000) 
Proceeds from debt  575,000  
Other financing, net(1,592) (901) 
  Net cash used in financing activities(188,712) (156,038) 
   
Effect of exchange rate changes on cash and cash equivalents1,653  (4,406) 
Net (increase) increase in cash and cash equivalents97,908  115,337  
Cash and cash equivalents at beginning of period359,799  208,623  
  Cash and cash equivalents at end of period$457,707  $323,960  
 

Reconciliation of U.S. GAAP Results to Adjusted Financial Measures
Financial measures in accordance with U.S. GAAP, including revenues, operating income and margin, net income, diluted EPS and cash provided by operating activities, have been adjusted below. FactSet uses these adjusted financial measures both in presenting its results to stockholders and the investment community and in its internal evaluation and management of the business. The Company believes that these adjusted financial measures and the information they provide are useful to investors because they permit investors to view the Company’s performance using the same tools that management uses to gauge progress in achieving its goals. Adjusted measures may also facilitate comparisons to FactSet’s historical performance.

Revenues

(Unaudited)Three Months Ended 
 May 31,May 31, 
(In thousands)20202019  Change
GAAP revenues$374,083 $364,533 2.6%
Deferred revenue fair value adjustment (a)1,169 1,274  
Currency impact (b)84   
Organic revenues$375,336 $365,807 2.6%

(a) The adjustment relates to deferred revenue fair value adjustments from purchase accounting.
(b) The impact from foreign currency movements over the past 12 months.

 

Operating Income, Margin, Net Income and Diluted EPS

(Unaudited)Three Months Ended 
 May 31,May 31, 
(In thousands, except per share data)20202019Change
GAAP Operating income$121,640  $117,240  3.8%
Intangible asset amortization5,107  5,928   
Deferred revenue fair value adjustment1,169  1,274   
Other non-recurring items (a)5,464  (1,647)  
Adjusted operating income$133,380  $122,795  8.6%
Adjusted operating margin (b)35.5% 34.0%  
    
GAAP Net income$101,216  $92,265  9.7%
Intangible asset amortization (c)4,204  4,797   
Deferred revenue fair value adjustment (c)963  1,031   
Other non-recurring items (a)(c)4,436  (1,333)  
Income tax (expenses) / benefits (d)(734) 5,296   
Adjusted net income$110,085  $102,056  7.9%
    
GAAP Diluted earnings per common share$2.63  $2.37  11.0%
Intangible asset amortization0.11  0.12   
Deferred revenue fair value adjustment0.03  0.02   
Other non-recurring items (a)0.12  (0.03)  
Income tax (expenses) / benefits (d)(0.03) 0.14   
Adjusted diluted earnings per common share$2.86  $2.62  9.2%
Weighted average common shares (Diluted)38,481  38,993   

(a) GAAP operating income in the third quarter of fiscal 2020 was adjusted to exclude $5.5 million of pre-tax net expenses primarily related to professional fees associated with the ongoing three year investment plan and facilities costs, which reduced net income by $4.4 million and diluted earnings per share by $0.12. GAAP operating income in the third quarter of fiscal 2019 was adjusted by $1.6 million for pre-tax net benefits primarily related to non-core transaction related revenue, offset by severance, stock-based compensation acceleration, transformation activities and occupancy costs, which decreased net income by $1.3 million and diluted earnings per share by $0.03. The income tax effect related to the other non-recurring items was $1.0 million in the third quarter of fiscal 2020 compared with $0.3 million for the same period in fiscal 2019. 

(b) Adjusted operating margin is calculated as adjusted operating income divided by GAAP revenues plus the deferred revenue fair value adjustment.

(c) For purposes of calculating adjusted net income and adjusted diluted earnings per share, intangible asset amortization, deferred revenue fair value adjustments and other non-recurring items were taxed at the annual effective tax rates of 17.7% for fiscal 2020 and 19.1% for fiscal 2019.

(d) GAAP net income in the third quarter of fiscal 2020 was adjusted by $0.7 million or $0.03 per share of income tax expense primarily due to a one-time tax audit settlement. GAAP net income in the third quarter of fiscal 2019 was adjusted to exclude $5.3 million or $0.14 per share of income tax expenses primarily related to finalizing prior years' tax returns and other discrete items.


Business Outlook Operating Margin, Net Income and Diluted EPS

(Unaudited)  
   Annual Fiscal 2020 Guidance
(In thousands, except per share data)Low end of rangeHigh end of range
GAAP Operating margin30.0%30.5%
Intangible asset amortization (a)1.4%1.4%
Deferred revenue fair value adjustment (b)0.3%0.3%
Other non-recurring items (c)1.3%1.3%
Adjusted operating margin33.0%33.5%
   
GAAP Net income$370,000 $380,000 
Intangible asset amortization (a)17,600 17,600 
Deferred revenue fair value adjustment (b)4,085 4,085 
Other non-recurring items (c)8,675 8,675 
Adjusted net income$400,360 $410,360 
   
GAAP Diluted earnings per common share$9.60 $9.80 
Intangible asset amortization (a)0.46 0.46 
Deferred revenue fair value adjustment (b)0.11 0.11 
Other/ Other non-recurring items (c)0.23 0.23 
Adjusted diluted earnings per common share$10.40 $10.60 

(a) GAAP operating income for the full fiscal 2020 year is adjusted to exclude $20.5 million of pre-tax intangible asset amortization, which reduced GAAP operating margin by 1.4%, GAAP net income by $17.6 million and GAAP diluted earnings per share by $0.46. The income tax effect related to intangible asset amortization is $2.9 million for the period presented above.

(b) The adjustment relates to deferred revenue fair value adjustments from purchase accounting. The income tax effect related to deferred revenue fair value adjustments was $0.7 million for the period presented above.

(c) GAAP operating income for the full fiscal 2020 year is adjusted to exclude $19.4 million of pre-tax expenses related to other non-recurring items. The net income reduction of $8.7 million and diluted earnings per share of $0.23 reflects the tax adjusted impact of the other non-recurring items as well as the impact of one-time tax items. The income tax effect related to other/ other non-recurring items is $10.8 million for the period presented above.


Free Cash Flow

(Unaudited)Three Months Ended 
 May 31,May 31, 
(In thousands)20202019  Change
Net cash provided by operating activities$150,953  $159,770   
Capital expenditures(11,010) (11,424)  
  Free cash flow$139,943  $148,346  (5.7)%
 


Supplementary Schedules of Historical ASV by Client Type

The following table presents the percentages and growth rates of organic ASV by client type, excluding the impact of currency movements, and may be useful to facilitate historical comparisons. Organic ASV excludes acquisitions and dispositions completed within the last 12 months and the effects of foreign currency movements. The numbers below do not include professional services.

 Q3'20Q2'20Q1'20Q4'19Q3'19Q2'19Q1'19Q4'18
% of ASV from buy-side clients84.1%84.1%83.9%83.7%84.2%83.9%83.9%83.9%
% of ASV from sell-side clients15.9%15.9%16.1%16.3%15.8%16.1%16.1%16.1%
         
ASV Growth rate from buy-side clients4.8%4.5%4.0%4.8%5.2%5.3%5.9%5.4%
ASV Growth rate from sell-side clients5.6%2.9%4.0%6.3%6.8%9.2%8.6%7.3%
  Total Organic ASV Growth Rate5.0%4.2%4.0%5.0%5.4%5.9%6.3%5.7%
 


The following table presents the calculation of the above-mentioned ASV growth rates from all clients.
(Details may not sum to total due to rounding)

(In millions)Q3'20Q3'19
As reported ASV (a)$1,493.8  $1,423.0 
Currency impact (b)(0.1)  
Organic ASV total$1,493.7  $1,423.0 
Total Organic ASV Growth Rate 5.0%    

(a) ASV excludes $24.5 million and $23.1 million, respectively, in professional services fees as of May 31, 2020 and May 31, 2019, respectively.

(b) The impact from foreign currency movements was excluded above to calculate total organic ASV.


FactSet Research Systems Inc.

Source: FactSet Research Systems Inc