Financial data and software provider FactSet Research Systems (NYSE:FDS) announced its fiscal fourth quarter results this morning. There are no major surprises and that's rather a good thing – a reflection of its high-quality, "steady-as-she-goes" business model.

On the headline numbers: FactSet's fourth quarter revenues rose 9% year-on-year (7% ex-acquisitions) to $238.7 million, slightly ahead of Wall Street's consensus estimate of $236.9 million. In turn, adjusted earnings-per-share advanced 11% year-on-year to $1.31, beating the consensus estimate by a penny. I'll note in passing that the adjusted EPS figure for the most recent quarter is "clean" – there were no adjustments made to Generally Accepted Accounting Principles (GAAP) EPS number (which makes it easier for investors to understand the true earnings power of the business.)

While FactSet's earnings press release does not contain that much color beyond the financial data, several key data points suggest that business is humming along – the company appears to have turned in a very respectable quarter:

  • Annual Subscription Value (ASV) rose 7.3% organically over the prior year and 3.4% over the past three months to $963.6 million. (ASV is a key measure, as it represents, "the forward-looking revenues for the next 12 months from all annual subscription services currently being supplied to clients.")
  • Why is Annual Subscription Value so important? Because it represents very sticky revenues. To wit, annual client retention in the fourth quarter was equal to 95% of ASV.
  • US and non-US revenue organic growth is evenly matched at 6.5% and 7.3%, respectively.
  • The operating profit margin increased half a percentage point during the fourth quarter to a superb 33.1%. That profitability drove quarterly free cash flow of $65 million (note that this exceeds adjusted net income of $55 million.)

Looking forward, FactSet's guidance for the current quarter ending in November has revenues in a range of $240 million to $243 million – right in line with a consensus estimate of $241.4 million. On the bottom line, the company is projecting adjusted EPS of $1.31 to $1.33; while this is below analysts' $1.34 estimate, it's not clear whether the latter figure accounts for the lapse in a Federal R&D tax credit, which reduces the EPS range by $0.02; if it does, FactSet is again right in line with expectations.

Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends Apple, Bank of America, and FactSet Research Systems. The Motley Fool owns shares of Apple and Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.