FactSet Research Systems (NYSE:FDS) provides financial institutions with the information they need in order to serve their individual customers, and good times on Wall Street have helped put FactSet's clients in a position in which they can take advantage of the company's offerings more effectively. Despite some concerns about the sustainability of the eight-year-old bull market in stocks, FactSet has shown no signs of slowing down from a fundamental perspective, even though the stock has lost ground from its highs earlier in the year.

Coming into Tuesday's fiscal third-quarter financial report, FactSet shareholders fully expected the company to keep its steady and impressive growth rate going for another quarter. FactSet largely delivered on that expectation, and it said that the work it has done to integrate its recent acquisitions played a major role in its success. Let's take a closer look at FactSet Research Systems to see what it said and what lies ahead for the financial services provider.

FactSet suite of systems.

Image source: FactSet Research Systems.

FactSet makes progress

FactSet's fiscal third-quarter results were very much in line with what those following the stock had expected to see from the company. Revenue was up 8.6% to $312.1 million, and that was just the tiniest amount higher than what most investors were looking for from FactSet. Adjusted net income climbed 8% to $72.9 million, and that worked out to adjusted earnings of $1.85 per share, topping the consensus forecast among investors by $0.01 per share.

Looking more closely at the report, FactSet has been able to maintain consistency in its growth trajectory over time. Annual subscription value was up more than 10% from year-ago levels, hitting the $1.28 billion mark. Even after accounting for the merger and acquisition activity that FactSet has seen recently, organic ASV climbed almost 6%. That growth came almost equally from both sides of the business, with growth rates for the company's sell-side customers just barely eking out a win over FactSet's buy-side customer growth by a tenth of a percentage point. Nevertheless, buy-side clients retained their grip on the overall business, making up more than five-sixths of FactSet's total ASV.

From a geographical perspective, FactSet's acquisitions made a huge impact on the international side. Annual subscription value internationally jumped by almost 25%, and even on an organic basis, the growth rate of nearly 8% easily topped the roughly 4% growth in ASV domestically. International business now makes up about three-eighths of FactSet's total business, and that number has steadily increased over time recently.

FactSet has continued to do well operationally. Retention rates on an ASV basis stayed at 95%, although the 92% retention rate looking at client counts was down a percentage point from last quarter. Client counts rose 225 to more than 4,625, with about half of the additions coming from acquisitions. User counts topped the 86,000 mark, and FactSet now has almost 8,900 employees on its payroll.

CEO Phil Snow explained the reasons for FactSet's success. "We are making significant progress in integrating our recent additions for building end-to-end solutions across key workflows in the portfolio lifecycle," Snow said, "which are critical to our success." The CEO noted that there are challenges in the market right now, but he's optimistic about FactSet's ability to overcome them.

What's in FactSet's future?

FactSet isn't troubled by the potential for changing market conditions. As Snow put it, "We have a solid strategy to capitalize on the market trends and deepen our client relationships." Moreover, CFO Maurizio Nicolelli pointed to disciplined cost controls and a smart capital allocation strategy in helping to promote a favorable environment for growth.

Yet FactSet's guidance for the fiscal fourth quarter was somewhat mixed. Sales performance looks like it's going to be favorable, with guidance for between $321 million and $328 million in revenue setting a range above the current consensus forecast among those following the stock. However, adjusted earnings expectations of $1.86 to $1.92 per share would set a midpoint below the currently expected $1.90 per share, despite the fact that the implied 12% growth in the bottom line would represent a good showing from the financial services company.

FactSet investors didn't immediately react to the news, with the stock seeing no movement in the pre-market trading session following the announcement. In the long run, though, FactSet shareholders hope that the consistent growth that the financial information provider has managed to achieve will spur further share price gains and allow them to share more fully in the stock market's overall uptick in recent years.