FactSet Research Systems Inc. (FDS) Earnings Call Transcript & Summary

Good morning, everyone, joining us here at the NASDAQ MarketSite in New York City, as well as those joining us globally on the webcast. My name is Kendra Brown. I'm Global Head of Investor Relations for FactSet. And on behalf of the entire leadership team, I am thrilled to welcome you to FactSet's 2022 Investor Day. Before we begin, I would like to remind you that some of the statements made today will be considered forward looking in nature and may contain non-GAAP measures. This information is subject to risk and uncertainty, as outlined in our SEC documents. Please take a quick minute to review the safe harbor language on the screen now. For nearly 40 years, FactSet has been a trusted partner to the investment community. And over the course of the day, we will give you insight into why we win and how we plan to continue providing our clients with industry-leading services. Today's presenters will speak to our strategy, our product, and how that translates into continued growth. With that, I'd like to welcome to the stage, FactSet's Chief Executive Officer, Phil Snow.

Thanks, Kendra. And though it may not appear like that, I do own more than one jackets. That's just for everybody. So thank you all for joining us in person today. And all of you that are joining us virtually, welcome to FactSet's 2022 Investor Day. It's been 4 years since the last one, which we had at the New York Stock Exchange. I think a few of you saw us there, and we're very happy to be here on the NASDAQ MarketSite today. So today, we're going to review our strategy in some detail and we're very proud of what we've accomplished over the last few years in particular. So we're going to talk about how our strategy has influenced our performance, and we're going to talk about how our strategy is going to influence things moving forward. Over the last year or so, we've accelerated our top line growth rate significantly. We've joined the S&P 500. We've done the largest acquisition in FactSet's history. We've issued our first bond and got investment-grade ratings from both Moody's and Fitch. So there's a lot for us to celebrate and be proud of as a company. So through a few key messages we'd like to leave you with today, first is FactSet is a growth company. We are committed to growing our top line and continuing to innovate in our space and really take advantage of all the trends that are out there. And we really see a lot of the market trends that are out there are really tailwinds for us essentially in terms of how we've transformed the company over the last few years. We have significantly invested in our digital platform. We're going to talk a lot about that today. And for those of you that are new to the story or even have followed us for a while, I think it's a very good opportunity to hear from our leaders and really understand FactSet's digital platform and how that is an engine of innovation for the industry and for our company and how that's going to fuel top line growth in the future. And lastly, I want to emphasize that FactSet's addressable market has expanded over the last few years. The work that we've done has allowed us to get into more firm types, more workflows and is fueling a lot of the top line growth that you've seen, particularly over the last year. So I think it's fair to say that 3 years ago, or 2.5 years ago, when we talked about accelerating our top line and investing in new areas of content and digital transformation, there were some skeptics. I think some of you may have felt that it was too hard for us to grow our top line from mid-single digits and that the forces that are out there in the industry, particularly the shift from active to passive, was tough. But I'm very proud of what we've done. We've overcome that. We've diversified our platform and the market that we serve. So I do think that those forces that were out there that I think some of you were worried about, I think you should be less worried about moving forward. And you can see that in our performance. Over the last 5 years, FactSet has outperformed the S&P 500, and you can cut pretty much any time period you want since we've been a public company and FactSet has been a growth company. We've done very well, and we've also been very consistent. So there are really a handful of companies that are public that have grown revenues and earnings as consistently as FactSet has over the last 25 years. And that's one of the things that makes us such an attractive investment, including us being primarily a subscription business. We're over 98% subscription, which is unique within our industry, and I think is one of the reasons why we have such a good valuation. So our strategy is to be the leading open contents and analytics platform in our industry that provides differentiated advantage to our clients. And this is the 1 thing that today, other than the numbers that I would like you to focus on, you're going to hear from Kristy, Gene and John about what we call our content refinery. That's really the base of FactSet's digital platform. We collect over 30 core content sets ourselves. We have over 800 third parties that deliver data into the FactSet ecosystem. And we upload over 4 million portfolios every day, which represents around $30 trillion in assets in the marketplace. And it's this comprehensive suite of data and how FactSet connects it that really powers a lot of -- the value that FactSet provides and really is a big moat for us in the industry. It's very hard for newcomers to come in and have that much data with that much history. So this content refinery really powers the workflow solutions for our clients. We talked a lot about the portfolio life cycle. So even going back more than a few years ago, some of the acquisitions that we made, that Rob will talk about, have really helped us to accelerate our growth on the buy side. So that piece of our business where there's the most cost pressure, the institutional asset managers and asset owners, we've done a lot there to grow our market share through that workflow. And we're not really growing the institutional asset management piece of our business with new seats. It really is these enterprise solutions that go across the back, middle and front office that are accelerating our growth there. A lot of the growth you see in the seats is not coming from that part of our business. But despite that, we're able to grow very quickly. And the big opportunity here is to do, in other firm types, what we've done in institutional asset management. So Goran will speak about private markets, private equity, venture capital, he'll talk about the wealth space, and he'll talk about how FactSet is going to extend what we do for those firm types the same way that we've done for the buy side. And last but not least, FactSet is very client focused. We're obsessed with clients. A lot of us grew up supporting or building product, and we really take a deep interest in our clients, their workflows and building solutions for them. So a couple of things we've done that are important to understand is we've opened up the platform significantly. So over the last few years, with the investment in digital transformation, we've created APIs that hit just about every engine that's on FactSet that powers the workstation, every content set. And we're able to plug these in now to our clients' workflows wherever they want and through a lot of other third parties that are in the ecosystem. So that's helped us significantly on the buy side. We're also very focused on creating a hyperpersonalized solution for users. So FactSet is awesome in that you can personalize it, create your own workflow, but we're now using a lot of other techniques to be that co-pilot for wealth advisers, portfolio managers, and really surface intelligence for them without them having to pull it out of the platform. So we're going to spend a couple of hours on that. So buckle up, pay attention. And I think if you really understand that piece of the story, it's going to help you understand FactSet as a company a lot better. So these are the main trends that are out there in the market. They've not changed that much, frankly. I would say the biggest one that I spoke about already is helping clients be more efficient. So there's tremendous cost pressure in the different firm types, particularly on the institutional asset management front, and most of these large companies want to do more with less providers. And there's really just 2 or 3 or 4 maybe firms in our space that can be that anchor partner for a large asset manager or a bank, and FactSet is one of those. So we're sitting down with a lot more technology groups, data groups and helping clients streamline their workflow and streamline how they manage data. That's huge. Technology disruption. We're market leading in terms of how we've invested in our platform and opened up the platform. If you're here on site at NASDAQ, please look at some of the demonstrations. We have very good examples of how FactSet has opened up its platform and how you can come in and programmatically access FactSet, which is different than what you might have experienced using the traditional FactSet workstation. And the shift to multi-asset class has been ongoing, and there are new asset classes and themes showing up all the time, which we're investing in and very fit to serve in terms of the markets. So I would spend a little bit of time on this slide in particular. So we're over $1.7 billion now. This data is a little bit, maybe a year or 2 old, but our serviceable addressable market is at least $10 billion and rapidly expanding. And if you look at this chart over here, the dark blue sort of represents what the serviceable addressable market is of FactSet, and the light blue represents what the total addressable market is, and that's what we want to get more exposure to. So you can see, like from left to right, what's the compound annual growth rate of these firm types for FactSet and what's our ASV. So you can probably make some good assumptions about what numbers should be on these axes, but you can probably get a lot out of the slide if you pay attention to it in terms of what FactSet's market share is with some of these firm types, what the growth rates are and the opportunity that's in front of us. And you'll hear a lot from not only the business line leaders, but also Helen will talk in depth about this towards the end of the presentation on firm types and how our different workflows are distributed across those firm types. And our success over the last year or 2 has been broad-based. It's not just been by firm type and it's not just been by workflow, but it's been by geography. So over the last year or two, we've doubled the growth rate in every region, EMEA, Americas; not quite doubled in Asia Pac, but over the last 2 years, gone from 7.5% to 14.3% as of the last quarter. So our success is distributed. It's not just sort of a one-trick pony in one segment of the market. And for those of you that have covered us for a while, in the middle here, you can see what we set out to do in September of 2019. So 2.5 years ago, we talked to you about raising FactSet's top line growth rate from mid-single digits to high single digits. We talked about, after investing, getting our adjusted operating margin back to 33% plus and getting back to a 10% adjusted diluted EPS growth rate, which FactSet has done beautifully for the last 25-plus years in the market. And I'm quite happy to say that we've done all of those things. We're over 9% now in terms of our ASV growth rate. That's organic. These last 2 figures here, 33 to 34, and 14 to 17, in terms of the guidance we gave recently, those do include some of the benefit from CUSIP, but if you strip that out, we would still have hit the 33% and 10% growth rate. So good job FactSet team. And here's what we're here to talk to you about today. So we're going to keep it going. We're giving you some medium-term goals that on average, over the next 3 years, FactSet will deliver 8% to 9% ASV growth which, if you do the math, adds up to more than $0.5 billion in additional ASV cumulative over the next 3 years. We're committed to some margin expansion to get to 35% to 36%, and we're committed to adjusted diluted EPS growth of double digits over the next 3 years. And all of this, Linda will get into in great detail at the end of the presentation, but this still allows us to significantly invest in the platform and continue to drive that top line growth, which is something that we're very focused on as a company. So I'm now going to hand it over to the rest of the FactSet team and look forward to answering questions towards the end of the day and mingling with some of you during the breaks. So I believe now we're going to have a panel on our digital platform.

All right. Good morning again. I am joined by John Costigan, our Chief Content Officer; Kristina Karnovsky, our Chief Product Officer; and Gene Fernandez, our Chief Technology and Content Officer. And we're going to discuss with you our digital platform. As Phil highlighted, our ability to have an open ecosystem and to connect content is a huge competitive advantage for FactSet and then we're going to talk more about that today. So I'll start with you, Gene. Describe our open strategy and how it's resonating with the market.

Sure, and thanks so much for inviting me today. It's really special to be an engineer up here in front of you all, and I knew I could participate because there was no tie required today. So as some of you might know, I'm coming up on 5 years of FactSet. Previously, I was 20 years in the industry on the client side. So really familiar with all the competitor offerings. And when I got here, one of the things that I thought was important to do was to satisfy some of the needs that I felt were unsatisfied. And the open strategy is really about opening up our platform, so that every feature, every function, every data asset that's in FactSet is now accessible through APIs. So clients can use APIs to really customize and personalize their workflows and this was a key pillar of our 2019 digital transformation program, and it's gotten really great feedback and acceptance in the market. So really excited. And I think we're in such early days in discovering the ways we can now power our client workflows.

And Kristy, as our CPO, how has this helped evolve the way our product offering evolves in response to the industry needs?

Absolutely. Well, I think our product has really been evolving in many areas, but 2 key ones that tie into some of the industry trends that Phil was just mentioning are around content and technology. So the universe of investable securities and asset types just continues to expand. Over the years, we've seen such an enormous growth in investments in private markets and alternative assets, and also in value investing, which drives the need for much more content and transparency for clients. And then, of course, there's always new asset types like crypto. So one of the ways that we always involve our product is to continue to grow the universe of content that's available on FactSet. And the work that Gene and John's teams have done and continue to do just makes us more and more efficient at being able to do this. The other way is around, every single one of our client types has a business outcome to become more efficient. They're all trying to drive at this. And so our investments in our open technology platform really help to supercharge this and make this possible for clients. And we take -- on the product side, it's a very persona-driven approach to really augmenting and assisting and elevating our users, whether they're wealth advisers or portfolio managers. So we are helping them to automate parts of their workflow and really get more -- help them to do more than their human capabilities with what's possible with technology. So for example, we can use machine learning and cognitive driven signals to help people find new customers or identify new risks or new investment opportunities. So those are really 2 of the key ways that I think our product continues to evolve over the years.

What's amazing and why this has been so successful is that we are on the same journey that our clients are on. So John, can you talk about the impact of FactSet's own digital transformation on our content.

Sure. It's been pretty dramatic. So the content digital transformation is sort of giving us a chance to take a step back and reimagine how we collect content. The tools available today are so much better than when we started. And when we take that fresh approach, we're able to cut out a lot of steps in the process. So we really think automation first and then strong data governance, which drives a much higher quality product at the end. We've built a lot of self-service tools. So content managers can go in and integrate data without the need for a software engineer, collapsing the cycle. So half of FactSet's employees are in the data business. And the content digital transformation is driving scale, timeliness, accuracy, coverage and usability.

And John, we talked about the content refinery a lot. How has that made us more competitive? Why FactSet content?

Yes. I think Phil touched on it, too. We start with 25 proprietary content sets. You layer in data from 800 vendors and brokers. But really what brings it alive is the portfolios, the 4 million portfolios, millions more watch list. When we combine all that data with what the user cares about, it really brings it to life.

And Gene, how does this marriage of our content refinery and FactSet's cloud approach help clients?

Yes. So originally, our cloud strategy was all about agility and innovation for ourselves. So being able to do things that previously weren't practical to do and maybe not cost effective to do. But it really evolved over time. And what we underestimated is the interest and ability to meet our clients in the cloud and to really support their journey to the cloud. So 5 years ago or thereabouts, when I joined, clients were just thinking about the cloud, and was it for them, was it relevant, and what was their strategy? Today, every client that I speak to, on both the buy side and sell side, has a public cloud strategy. And FactSet products, because they're cloud ready, and we've opened up the platform with APIs, we can simplify clients' journey to the cloud. So as an investor, I would think of FactSet as really a financial cloud company with a lot of the same features that most of the public cloud providers have. And in addition to all the assets that are now in the cloud, there's also self-service capabilities. So clients can discover what we offer through our public websites. And they can even test some assets and they can even start some subscriptions. So I would think about the mega trend, which is financial services companies moving to the cloud, and how FactSet is enabling that and kind of powering that forward.

And that really speaks to innovation. And I spent most of my career here in products, so I believe in product. And that really is the part of the lifeblood of why FactSet is able to continue to evolve. I started my career many, many years ago. And Kristy, I'm curious, when you think about that, what are the trends we see with the core FactSet user changing over the last 20 years?

Yes. It's fun to think about that. 20 years ago is about when I joined FactSet as well. And I think at that time, a lot of our core users were probably still on their first cellphone. They might have also had a palm pilot at that time, maybe even a pager. They probably commuted to the office 5 days a week and probably read the print edition of the journal or the FT. And then when they got to the office, they could log into their PC and they would have FactSet installed on their -- physically installed. And they loved it because it would save them hours of time because we had and we still have refreshable codes for their Excel models. They could enter parameters and screen for companies that met any number of criteria and they could download tons of different reports and data right out of their FactSet Workstation. Fast forward 20 years to today, a lot of our core users grew up using Google to search for everything. They've got a smartphone that is customized to their preferences, with their own apps and settings, and it connects them to the world 24/7, no matter where they are. And a lot of times today that's not in the office. They're everywhere. So they're used to this personalized digital experience. It's also interesting to see that a lot of our core users today have some coding skills. They're coming out of school. They understand Python, a lot of them. And a lot of our clients are really seeking out that skill set in their financial analyst hires. So those are some of the differences in kind of the way that our core users are working in their day-to-day life. And as the boundaries around what is possible continue to expand with new technology, the users' expectations continue to rise along with that. And that's what really drives our continued evolution. So today, a FactSet user, they can access FactSet on our web product, still through their PC, on their mobile. There's some amazing sandbox and programmatic access portals that Rob will talk about and you can check out over in the demo. So the core FactSet user experience has continued to evolve. In addition now, just like those people who are used to using Google, on FactSet, you can do a natural language search for things like low-fee ETFs or for companies impacted by sanctions. People want things personalized. So if you happen to be someone who follows REITs or a REIT banker or something like that, you will get customized signals that can alert you if there's something that's happened with the top tenant of a property owner. And so I think these are some of the examples of how our product continues to evolve with users, and that's really the mindset of our whole product team. We're thinking about equipping tomorrow's analysts and already today we have a lot of excitement around what the next 20 years will bring.

The imagery you just painted was really powerful about the evolution. And for no other reason, it's because I had a pager, and it was purple. So it really resonated with me. Kristy, we've announced last year, you are newly appointed CPO. You've been doing amazing work in the organization since starting that role. Can you talk about your vision as CPO and how it would allow us to sustain growth?

Totally. Yes. So when I joined FactSet those 20 years ago, I spent the first 15 years or so in a sales role. So very connected to the client value drivers, the go-to-market process. And then for the past 4 years, I was leading our research business. And so very immersed in product development and engineering. And this role, Chief Product Officer, is a good blend of those 2 mindsets. And so what I'm really focused on now is making sure that our portfolio of solutions continually drives and delivers unique value to our customers. And at the same time, making sure that we're deploying our resources toward the most viable opportunities for FactSet as well. So there's really 3 areas that I'm focused on to drive and balance those 2 things. The first one is around how we set our strategy. And we take a firm type or market-specific approach to developing our strategy. So we think about, okay, what is the workflow of a wealth management firm or an investment bank or an asset owner? And of all of the different challenges they have, which are the best ones for FactSet to address? And so I think we always think about how we win on the buy side or the sell side. It's always a combination of solutions from our different business areas, whether that's CTS or Research and Advisory or Analytics and Trading. So it's very important to think about the holistic firm type strategy. The second thing I think about is our approach to product management at FactSet. And I'm super passionate and very excited about the modern approach that we're taking, which is to say that our product managers are responsible and empowered and accountable to own the product life cycle from idea validation, all the way through to product retirement. It doesn't work like this at every company and it's so important. It really drives our innovation and our ability to be nimble and to make sure that we are using our resources on the best possible opportunities. So sometimes the most important role that a product manager can play is that of a bad idea killer. And we have hundreds of product managers who are empowered and accountable to make sure that we're working on the most high-impact projects at all times. So we have firm type strategy, our approach to product management, and then finally, it's super important and a big focus of mine, to drive the rigor and discipline around how we manage our portfolio of products as well as our strategic investment portfolio. So there's a lot of different metrics and KPIs that myself, together with Linda and the finance team, that we're measuring and tracking to make sure that we are always on top of the health of our products and investments and once again, just making sure that our resources are deployed appropriately.

And John, what Kristy is talking about with product is really fueled by our content. We've spoken a lot about our investment in content. Can you speak more about that?

Yes. So we're in the middle of the largest content expansion in FactSet's history. A lot of that is driven by moving a lot of unstructured data in as opposed to the difference between public companies and private companies. So if you think about us collecting global fundamentals on 50 public companies, we're doing a lot of the same work, but for millions of private companies. So the amount is going up tremendously. But in terms of the investment, the usual suspects, deep sector, private markets, ESG, a lot of the wealth data sets. If we think about deep sector, we've produced over 200 releases since we started the product, I think it was 3 years ago. So just a tremendous number of content and application releases. Another area we're very excited about is real-time market data. Today, we cover thousands of markets from about 260 global exchanges. And we're adding more every quarter and we're going to do a lot more next year, too. So that's an exciting space for us as we round out full coverage globally. And lastly, StreetAccount is really 1 of the crown jewels of content at FactSet. It's really not traditional news. It's really the context on the news and how quickly you can understand what's happening. We're expanding that through Asia. So there's 10 countries we're expanding to. We're done with 5 already. And then the other thing that's so great about StreetAccount is if we buy BTU Analytics or Truvalue Labs, we can have news up and running with those data sets very quickly. So that's all live. And we're also doing recaps for crypto and other topics. So StreetAccount is really a big driver.

Yes. If I could just jump in there too. I think one of the most unique things about some of our investments in content as well is just how seamlessly concorded they are and layered into the FactSet experience and ecosystem. So when we talk about deep sector or private markets, these are not stand-alone systems that operate independently. These are beautifully integrated into the FactSet platform and experience that our users are so familiar with already. So in the same application, you can start with Disney and look at ad sales or broadcast stations. And with this change of a ticker, you could be looking at a pharma company and drug indications and pipeline. So there's not a lot of training involved, it's all seamless, and the same really innovative and time-saving functionality works beautifully with all of our different content sets, whether that's screening, or signals and insights, or as John was saying, what resonates so much with the users that we have is the ability to leverage StreetAccount news across all of our new content sets as well. So I think it's really important to think about that these are organically being added into the FactSet ecosystem and seamless to the user.

I think that's right. The word beautiful and concordance is not 2 words you often hear in a sense together. But what we've done is we've leveraged a lot of automation to make this really easy to do, and easy to do for ourselves, easy to do for our clients. And you'll hear more about that with JR. We've also tried to automate everything we can in terms of content pipeline. And that's allowed us to do a lot of low touch, no touch content collection and given the scale that we need to incorporate all this content that we've been able to do over the last couple of years. And I'm really excited about the opportunity here because it's an opportunity to drive down the unit cost and it's an opportunity to expand the content that we have as well as integrate third parties very quickly.

Yes. I think another point on context around deep sector. So we're doing 8 sectors now, and we're doing roughly 10 to 20 content sets for each sector. And as part of that, we're really going deep on assets. So if you think about oil wells or cellphone towers, we're collecting a lot of data on all that, tying it all together.

And that again speaks to that innovation that's the theme of FactSet that I really want to drive home. Gene, talk about what other technology that we're using to innovate.

Sure. Yes. So a couple of things I'm excited about. First of all, we've made a pretty meaningful investment in user experience. And I do encourage you to take a look at the demos and look at how good the products are, but more importantly than the way they look, how intuitive they've become. And so it doesn't require sophisticated education to come up to speed, and that helps with productivity. The second thing that I'm really excited about is cognitive technology. Historically, FactSet delivered a pretty wide set of data, very sophisticated analytics, but always relied on a very sophisticated user to navigate it all. And now with cognitive and machine learning, we're able to service insights. And some of the examples that are in production today that you can play with is see our predictions around activism, our predictions around secondary equity offerings, secondary debt offerings, the way we use transcripts to predict security market direction, and our S&P prediction. So predicting companies that are going to be included and excluded in the index. So we get really good feedback. When we compare our accuracy stats to what clients have done internally, we get really positive feedback that they've seen. We've been able to really push the bar up on the accuracy. So it's not just about doing these predictions, but it's about doing them accurately. Everybody is trying a little AI, not too many companies actually get it done right. The other way we're simplifying the user experience is we want to get to a point where you can interact, you could speak to FactSet. And so increasingly, we're using natural language in our search capability where you can ask FactSet questions like you would ask a human. And in PM10x, which Rob will talk about, you can actually have a bit of a conversation with our AI. So we're trying to push up the bar and create another way to meet our clients and a new channel. And then lastly, we've been using the technology quite a lot ourselves internally. And so we're able to use the technology and train the technology to do some of our collection. And what that gives us is that gives us the scale that John talked about, but it also gives us very repeatable accuracy and very measurable results. And so we're pretty excited about the opportunity and I think we're in early days. And I think FactSet is kind of uniquely positioned to leverage this technology relevant to most tech companies in that we have the data and the scale of data to train the AI for a very specific workflow and financial services.

A very fun fact that I'd like to quote is that we actually predicted our own inclusion into the S&P 500 before it happened. So you should write that in your notes. Now we will open up the floor for questions of our panel. I will remind people in our webcast that you can use the MMC platform to also ask questions. Kevin, up front?

Really super, super event. Gene, you talked about your clients' cloud transition. Where are they in that process? And where are you, right? Because there's obviously a couple of phases to it. And as I think about it, it drives a lot of incremental efficiency to your model and theirs. Maybe help us understand where they are? And are you at the cutoff from kind of on-prem into the cloud? Help us understand that a little bit.

Sure. Yes. Thanks so much for the question, Kevin. So a couple of things. So one is, increasingly, I'm spending a lot of time with my peers and clients. And like I said, 5 years ago, they were just in the planning phases, right? So they weren't sure if they wanted to leverage the public cloud, and if so, to what extent. That's completely changed, right? So now everybody has a cloud strategy. And most of them are very ambitious strategies. So most clients are looking to move the majority of their infrastructure to the cloud. And that's what's really exciting is we can compare notes on our experiences and we can build assets that facilitates that migration and assets that are consumable and chargeable based on usage. So it starts to make us look and feel like a cloud company. In terms of our own migration, a couple of things. So 1 is, we underestimated how much interest there would be from clients and meeting in the cloud. So things like Snowflake and AWS Redshift, our integrations there, our integrations on the other cloud providers, has really gotten a lot of interest and not only facilitated their migration, but given us -- drove some of the top line that you're going to see in that JR is going to speak about. But luckily, for our migration early on, we got ahead of schedule in terms of rationalizing our own infrastructure. So we were able to move a lot of the infrastructure of FactSet early on because it was very modern and everything new. We were building in a way that was cloud-ready. And so that gave us some early on cost savings. In terms of where we are today, we achieved greater discounts with the cloud providers than we anticipated. So that gave us another tailwind on cost savings. And despite meeting clients in the cloud, despite trying to prioritize any cloud deployments for our clients, we still think we're on track to achieve our cost savings in late 2023. So we're really happy about the program overall and really excited about the uplift, and to Phil's point, the way it's expanding our market in a material way.

We have a question up front with Alex.

Alex Kramm, UBS. You mentioned deep sector on the content side. I feel like we've been talking about this for a couple of years now. I think Phil, on the earnings calls, has mentioned it, in particular, as having help with retention on the sell side. I'm sorry if I'm paraphrasing here, but can you maybe flesh out other benefits that you've seen? So a, maybe put some numbers around like how it's helped with the sell side, maybe also how it's going on the buy side, if you're actually generating new clients? Any sort of revenue numbers you can put around, if you can isolate deep sector? And then lastly, I know it's long-winded, have you seen actually clients maybe sacrifice their incumbent providers on the deep sector? Or is it more of a, "I'm using it in addition versus cutting out the competitor," so...

Thank you for the question. And I'll answer some of that, and you'll hear a lot more about deep sector during Goran's presentation a little bit later as well. But yes, we've certainly released a ton of new reports and functionality. You can check them out in the kiosks a little bit later. And it definitely has resonated extremely well with our banking clients, who provided a lot of the early feedback and helped us with developing the vision that we have for the product. But certainly, it has opened up new opportunities as well for us in the corporate space, and there's been a lot of interest on the buy side as well. So we're in kind of like year 3 of building out the product, and it has played a role in many of our renewals and in new business opportunities as well. So we've been really, really happy with the success. And like I said, users are really responding to the way that the content is woven into the FactSet platform, and calling out things like the ease of accessing, detailed estimates, as well as the customized StreetAccount top news, which we have for all of the sectors that we cover, which is the differentiator, and some of the signals and other capabilities are unique to FactSet's deep sector offering, and they're noticed when clients are evaluating what we have to offer there.

We have a question from our online audience. Andrew Nicholas at William Blair asked, what are the major difficulties in bringing in unstructured data on private companies into the platform? Many of your competitors are also focused on private company data. What makes FactSet's approach to this opportunity unique? What are examples of some content that other providers do not have?

So I think the first thing, the way we connect data is better than anybody else's. And I think with the new tools we have, we can really streamline the gathering from the web and other sources. So we're both bringing in paid sources, but we're also scraping the web and how we tie all that data together is going to paint a picture that we think is pretty unique. I don't know if there's more on the technology side, Gene.

Yes. I mean, I think the public sources we leverage for private markets are company websites themselves and news. And we're really happy with the AI models that we've been able to build and train and getting some really amazing accuracy stats that are comparable with our event collectors, right? So it's giving us confidence that we can do most of this collection, low touch, no touch, which gives us the ability to scale and really drives the unit cost of this collection down in a material way.

Question in the middle of the room. I'm sorry, I don't see your name tag.

Owen Lau, Oppenheimer. I have been using a lot of your API. Could you please talk about how do you gauge the penetration and utilization of your API, and how do you drive incremental monetization when you introduce more API to your system?

Yes. Thanks so much for the question. So we're looking at a couple of different ways to monetize API usage. As an engineer, I love APIs, right? I prefer to use APIs to interact with systems versus keyboard and screen. The thing about an API though is, instead of looking like 1 user, it can look like 10,000 users, depending on the usage, right? And so we've built a lot of infrastructure around kind of controlling and throttling that usage. But the opportunity that it's offering us is we can leverage consumption-based usage. So let users use it as much as they want and then achieve some incremental revenue based on their usage, right, with a floor. And so not unlike a lot of the kind of cloud providers. So I think the mega cloud companies have kind of established this way of operating with our clients. So it's very intuitive. Now because we're dealing with APIs, we're really touching a new part of our client base, right? So I'm talking to my peers. And previously, the CTOs of various companies were not the customers of FactSet. It was front office folks. So now we're tapping into new workflows that previously were untouched. And I think we're in very early days of this opportunity. And this consumption-based model is very attractive. And so that's something we're going to look to leverage. So service those clients with very low consumption requirements, but then give the opportunity to scale infinitely.

And in terms of the go-to-market, I would say, when we think about all of our different firm types trying to make their end users more efficient, APIs are an important ingredient in that recipe. So if you think about someone who might be leveraging a CRM, whether they're a wealth adviser or a banker as well as maybe a messaging platform, different internal systems, APIs can help connect the content into all of those different workflows. So that's one of the use cases that we see coming up a lot where APIs like natural language can help read someone's calendar, understand what companies they're meeting with, trigger some FactSet signals APIs to send messages to their teams chat. There's all kinds of things that can be done with APIs to really power that user augmentation workflow. So that's really how we think about it in terms of the go-to-market. And Goran and Rob and JR will give you other examples as well through the different types of APIs and where we're seeing them resonate a lot with the different clients.

Wonderful. I want to thank you, John, Kristy, and Gene for talking to us today about our digital platform. With that, we will have a break. And when we return, leaders of our workflow solutions will take the stage to talk about our platform and our solutions. So see you in a second. [Break]

This is Goran Skoko and I head FactSet's Research and Advisory business unit. I'm based in London, England. This is my 18th year at FactSet, and I'm very happy to be here with you today. I specialize in growth. So that's why they asked me to fly in today and present. FactSet's research and advisory focus is on delivering solutions to our clients in investment management, in investment banking, wealth management corporate space, and private equity and venture capital. The old way of thinking of us, of our business unit, is that we are the workstation business of FactSet. But however, the way the clients interact with our solutions has changed significantly over the last few years, and we drove some of the change. We recognized that we cannot own every workflow that our clients need to accomplish. But at the same time, we recognized that we can add value to most of those workflows. So we decided to componentize our offering and allow our clients to seamlessly embed those components in their third party and their own applications. This allows them to really get information, analytics that they need right within their workflow. They do not have to switch contacts. They do not have to switch to FactSet. To analyze the trade, they can do it right within the screen that they're in. So we componentized our entire offering. We made all content and functionality API accessible. And we also delivered standardized data feeds that also give clients that want to build everything access to real data and allow them to build those solutions. So that is what our CTS team focuses on. So let me give you a couple of examples how our clients benefit from this approach today. In wealth management, most of our implementations today also involve integration with clients' CRM. So clients will take our portfolio-focused solutions and we'll add those components right into their CRM. So wealth adviser receives a call from the client. Right at their fingertips is the FactSet portfolio component telling them everything about the portfolios, about the performance of the clients' investment, and we signal any events that the wealth advisers' clients should be made aware of. So it could be anything like earnings release or Investor Day call, dividend payout, expiration of a fixed income instrument that they need to reinvest in. So the other example is within investment banking. With the volume of deal flow and fight for the talent, most of our investment banking clients are looking to optimize their operation and achieve new efficiencies. So by opening up our workstation, making everything API accessible, we allow them to integrate with their robotic process automation tools and automate their process. So the groundwork that's normally performed by junior analysts or junior bankers can now be automated and our investment banking clients can achieve efficiencies of their business. So this open approach has been one of the main growth drivers for us. It has really allowed us to partner very closely with our clients with some of the largest implementations we have done over the past few years. So the results of the investments that we had committed to making 3 years ago are obvious. We have grown our ASV within our business unit to $836 million. And we are growing at 9.1% LTM growth rate, which is obvious, a significant acceleration and something we're quite proud of. So we have only begun to see the results of those investments. And we are very confident they have positioned us for the long-term high single-digit growth for years to come. Overall, we see continued growth in asset management and investment banking. And we also expect accelerated growth, continued acceleration in wealth management and significant growth from our corporate business as well as from private equity and venture capital. So let's get to a little bit of detail there. On the institutional asset management side, we have already seen our investments in ESG, private markets, globalization of StreetAccount, deep sector increase our retention rate and also allow better price realization of our products. We also have invested in building front office solution in partnership with Robert Robie's analytics and trading team, and Rob will spend some time describing some of our portfolio management productivity tools in his presentation. But the joint powerful front office offering will allow us to grow our portfolio manager, buy-side analysts and buy-side traders set going forward. So as Phil said, this is not the fastest-growing segment for us, but we see potential for significant acceleration there as well. Investment banking is where our investments in private markets and deep sector are most relevant. So we have seen early results from those investments, and I think we had a terrific first half. So Alex, you asked a question in terms of what is the impact that we can quantify? So I'll quantify it a little bit, as much as I can. We had 16 broker-dealer renewals that came up for renewal in the first half of this year. We managed to renew all of them. And we managed higher price realization for pretty much all of them, but certainly from that entire group. So these investments are having impact. We see additional demand on the buy side as well as in the other sectors, and Kristy mentioned corporate scenario as well. The private markets investment has also enabled us to compete much better for those mid-market banks, where we don't have enough exposure today and we can accelerate growth. And finally, these extended capabilities will allow us to grow share of specialized workflows. We are underpenetrated in restructuring capital markets, leveraged finance and financial sponsors. So those are all opportunities for us to grow within the existing clients today. On the wealth management side, so Kristy said she managed research for 4 years. I managed wealth management for 4 years. So I don't have any favorite children, but I love that baby. We have a terrific market position in wealth management. I think we certainly are recognized for having the market-leading product. We have managed to win some significant deals over the last few years. Most of you are probably familiar with us winning Bank of America Merrill Lynch in 2019. We had a string of other deals, and then we announced winning the largest Canadian wealth manager, RBC. But our success has been global. So we have had similar events in Singapore, Netherlands, Switzerland, Mexico. And so that all proves that we can compete very effectively in EMEA and APAC. And those regions will drive additional growth over the next 3 years. We do expect them to accelerate over the next 3 years. Corporates is a greenfield opportunity for us. So we see we have been growing in double digits. We've managed to double this business over the past 3 years, but we really foresee this continuing for the foreseeable future. And we are very excited about the relevance that increases with our deep sector capabilities and the new opportunities through highly personalized experience of our corporate users by having the deep sector content and analytics on our system. And last but not least, private equity, another greenfield opportunity for us. We have a tiny market share. The improvements in private company offerings have already improved our sales results. We have seen sales expansion in the first half, and we anticipate to take a much larger share of the private equity segment going forward. The acquisition of Cobalt, which is -- Cobalt offers tools that allow private equity firms to monitor performance of the portfolio of companies. So that acquisition is working very well for us. We have seen a significant uptick in client acquisition. It's a much faster sales cycle, and that Cobalt acquisition will drive growth going forward. So in summary, I think you'll see opportunities for expansion and a very good market position in all of these segments and that is what makes us so confident that we'll continue to grow in the high single-digit rate. So just then I will spend a couple of minutes on each of the significant investments. On the deep sector side, we have a leading desktop solution for investment banking today. So that's mostly because of our workflow capabilities that we offer to investment bankers. With investments in deep sector and private markets, we are building one integrated tool that will allow our clients to perform all of their single security, sector-specific, multi-asset class and private market research all in one place. We have seen clients in the past leave us for some of these workflows and go to other tools. I think with improvements and with these investments, we've become that one-stop shop where FactSet is excellent research tool across all of these asset classes and deeper research analysis. I mentioned that we are excited about opening up opportunities in corporates from this deep sector investment. In addition to more personalized, more relevant solutions, we will now be selling this unique content not only to firms, but also to their suppliers and vendors. So it really expands our opportunities significantly, and we are estimating a pretty large increase in serviceable addressable market by adding these deep sector capabilities. Our execution strategy has been -- John and Kristy touched on this, and Gene, to significantly increase our proprietary content collection capabilities. We partner with many firms and we're also looking to acquire where we lack some of the capabilities. So you have seen us acquire BTU for the energy sector coverage and [ Banks Scientific ] in order to cover banks. Where are we on this journey? We have released banks, insurance, and real estate as MVPs. So clients can perform all of their core workflows using our capabilities. And we have released many of the content sets and reports for all the other sectors and all of them will be in that same state of clients being able to utilize them for the workforce in the next few months. The clients' response to this effort has been terrific. So we have many of the global leading banks partnering with us and interacting with our sector leads, providing feedback. They're truly a co-pilot in this process, which just shows how much appetite is there for another solution and for us to succeed in this effort. On the private market side, reasons for investments are fairly obvious. Institutional money keeps on flowing into the private markets sector. Institutional money managers are investing in record numbers in private markets. And we see similar trend from wealth managers. There was a recent, I think, last week, research report that said that 19% compound rate growth will be achieved in private market investments from high net worth and ultra-high net worth individuals. So it is obvious to us that we have to invest. It's going to impact every segment of tax at service. So it is one of our key initiatives. The sector that impacts the most is banking and private equity and we see that as a very large opportunity for us. And it is supported by this private company coverage. Our strategy is to try to level the playing field to allow our clients to perform the same level of analysis on private companies that they can do with publics. So the way we're achieving that is not just to expand the coverage, but to expand it in a way that we provide high-quality private company coverage. Wherever we can, we will provide estimates of the financials for the company, EBITDA, revenue, anything that we can. And we are also classifying those companies in alignment with our public peers. So that will allow our clients to compare themselves on the corporate side properly to all of the public and privates that they compete with or other peers. And it will also allow better targeting for M&A activity by investment bankers, private equity and corporate development teams. So it's not a [ me too tool ], it's something that's really in line with how FactSet approaches all our development and enables proper analytics on our platform. And we will achieve further differentiation by providing true value ESG ranking for private companies -- for 200,000 private companies by fiscal year-end, and JR will speak more about that in his presentation. Advisor Dashboard, this is, by far, one of the most exciting products I have been involved with. And I would encourage you to both attend the demos of deep sector and Advisor Dashboard that we have provided in the break. But what problem does Advisor Dashboard solve? Advisers currently serve the larger, more client relationships than ever. So on average, wealth adviser services, 200-plus relationships, which translates in them having to monitor 800 to 900 portfolios. And it is a strong desire of wealth management firms to increase that, as they have to acquire more clients and have to transition them to high net worth and ultra-high net worth. So it is impossible for an adviser to keep on top of all of those investments without help of technology. What's unique about the Advisor Dashboard that in the past, advisers will normally look at their investments one portfolio at a time. But we have created this cockpit that's truly a copilot for them, where we aggregate their entire book of business in one place. And they can see everything that's impacting the investment across all of the relationships in this one dashboard. So in some of the recent wins that we had, there was a client that commented that prior to getting Advisor Dashboard, they had to access 6 different systems to get the same level of information. And then we had a client who somehow managed to estimate how much time it was saving and he estimated 20% plus of his time was being saved by using Advisor Dashboard. So it is a terrific tool. We aggregate all of the portfolios and associate them with advisers. And then advisers can group them based on any characteristics. Most of the time, that is by household that they service. But it can also be grouped by tax status, by the investment objective or anything that advisers see relevant. And then as we signal and provide some of the key information such as news, research, any ML/AI signals that we may be producing, they're no longer sorted in chronological order, but they're sorted based on importance. So you can -- So instead of getting a news headline that's chronologically ordered, you're getting it based on assets under management or the number of relationships that you manage. So you can quickly see how many people you have to contact. It's integrated with the information in the CRM and you can quickly get to and perform that workflow. We are even more excited about the opportunity that creates for us for additional workflows going forward and expanding into some of the portfolio workflows. PMS space in wealth management is much larger than $2.3 billion we service today. The PMS space is approximately $6 billion. And as we keep expanding functionality and using Advisor Dashboard as the launch pad, our addressable market will increase. Like I said, it has been a terrific tool for us. It's been out in the market for 18 months, and it has been a key for some of the great wins, as well as sellable products on its own. So let me just quickly summarize. We do see continued growth in investment management and investment banking, 2 of our largest segments. And we expect Wealth, Corporates and Private Equity to further accelerate our growth. We are very confident that high single-digit growth is sustainable and then we'll continue to grow in that space. Lastly, before I leave you, I just wanted to say one thing. I have never been as confident in our market position and our road map will continue to deliver growth. The sentiment from the clients who appreciate how much we keep on investing in ourselves, keep investing in our products and delivering value to them, that sentiment is priceless. And that is what's going to continue to win us new clients and -- as well as maintain current ones. So thank you. And now, I'll pass to Rob Robie, who heads our analytics and trading team.

I'm not quite as tall, but we're still pushing for growth, I promise you. Okay. By quick way of introduction, my name is Rob Robie, and I lead our Analytics and Trading division here at FactSet. When you think about the Analytics and Trading division here at FactSet, I would think about 3 key components. I would think about our front office solutions and how we bring our analytics and trading to the front office. I would think about our middle office solutions in terms of how we service our clients in terms of their performance teams, their risk teams, their porting teams and a lot of the core middle office functions. And the third pillar I would think a lot about is our analytics services business. So this is probably one of the least well-known aspects of the business, but it's a very key component to what we offer today. And our analytic services team -- our analytics services, is a team of professionals that use home-built technology and third-party technology to do a couple of key things: One, make sure that we're able to integrate all the client portfolios we've talked about and are going to continue to talk about; two, make sure they're accurate; and three, also help with implementation and even outsourcing services associated with our front and middle office solutions. These 3 components are what are driving the $619 million of ASV, and it's also what's getting us knocking on the door of 9% growth overall. So 5 key highlights. Out of the 5 key highlights, a key tenet to Analytics and Trading is our portfolio life cycle strategy. And our portfolio life cycle strategy, many of you in the room have been hearing about it for a number of years. It continues to really mature. And that really is connecting our front and middle office solutions in a way in which we can offer an enterprise, offering to our buy-side clients, but also, doing that in an innovative way through new uses of technology, a lot of what Gene and team have talked about. The second key highlight is hyper-personalized applications. And when we think about hyper-personalized applications, there's a lot of opportunity for growth for FactSet with the: Analytics and Trading offerings in the front office. And in particular, I would say, portfolio managers and traders are a big opportunity for us. Goran touched on our front office solutions for research and wealth. And in conjunction and partnership with Goran, as well as Gene and others, we're really thinking about different ways to differentiate our front-office offerings. So for example, in the portfolio management space, we're thinking about cognitive computing, and we're going to do a little bit of a deeper dive on what that looks like here shortly. And it's also about our trading capabilities and our EMS capabilities, making traders more effective using algorithm trading and APIs to really push that forward. So the third key component I would talk about is our middle office. Many of you have known FactSet for a long period of time, know our strengths in the middle office. We still see ourselves as one of the industry-leading providers in the middle office. And that resides around our portfolio analytics application and capabilities, that resides around our multi-asset class risk capabilities, and that also resides around everything that we're doing in terms of performance overall. So as you think about that, we continue to invest heavily in our middle office as we look to expand further into the front office. Within that framework, right, that's where the 4 million portfolios come from. That's where we have part of the major crown jewels of our clients, and that's their trust in us to take those 4 million portfolios and bring them across the entire life cycle. So the fourth element I'd like to talk about is I already touched on it briefly, is analytics services, and that's really the ability to make sure that we are helping our clients implement all of these solutions, taking the burden off of them, making sure that the data is accurate and making sure that they have a resource and a team that can assist them with any of their daily needs associated with the entire plc. And the fifth key highlight that I would bring out is -- we talked a lot about it. John Costigan, got into detail about the breadth of data that we're adding. Kristy talked about it. Gene had talked about it. We're really -- across this portfolio life cycle, it's not only working with the client portfolios, but it's marrying the client portfolios with all of the data that we are acquiring or collecting. So there's new opportunities. When we think about ESG, how does ESG impact the front and middle office, what can we do for compliance, what can we do for portfolio construction. And the list goes on, right? We think about supply chain information in terms of portfolio construction, our own industry classifications and how that all ties in. So there's a lot of unique content sets that really allow us to fully unlock the entire portfolio life cycle across the front and middle office. So let's dive a little bit deeper in terms of the opportunities for growth. And when we think about it, it really is about growing the front office. So we made a conscious decision to move into the front office through the acquisition of Portware several years ago, and we've been continuing to build upon that. We've invested in the technology. It's multi-tenant. It's cloud-enabled, as we talked about the migration to the cloud. It brings a great deal of scale. It is one of the leading industry institutional trading platforms in the market today. And with that, though, we're also bringing a secondary version of that to market through FactSet EMS. And FactSet EMS is going to be a native, embedded EMS solution into the FactSet workstation for the mid and smaller tiers of our buy-side client base. As we also think about our front office capabilities and trade execution, it's expanding the asset classes that you can trade on FactSet. One of the key drivers for us has been the release of FX trading on FactSet. It's about 18 months old, but we're now seeing the ramps associated with the transactions of trading FX, along with trading equities on the platform being a driver of growth. We recently had a public press release on the announcement of our partnership with GIC as a lighthouse account in terms of our launch of fixed income trading in the market. So we've gone from just equities a few years back to now, FX and now also, fixed income capabilities. So that's a huge driver for us, and that's going to carry through all of our trading capabilities. Another component I really want to call out specifically is our official performance solution. So PA has been a flagship product for 20 years, but clients are always knocking on the door, saying, is it official performance system? And the answer is you can run attribution, you can run any analytics that you want but it's up to you, the client, to make it an official performance system in terms of how you handle the data and locking data down. Clients said, well, can you turn it into an official performance system? And that led to the acquisition of BISAM. And over the course of the last 3 years, we've been advancing our technology in migrating PA and BISAM closer and closer together. So you'll hear of an application in the market known as the Vault. It's a product that we sell to help enhance performance solutions for our buy-side clients. It's really about data management and where data persists. It's an open environment, you can run official performance, official risk, store it in our Vault capability and then unlock it through APIs or unlock it through other means in terms of connecting it to Snowflake or Redshift or other technologies that our clients may be utilizing. It's been a differentiator and it's brought B1 NPA, our portfolio analysis applications together, further and further into what is now the FactSet performance solution or I hate to use acronyms, I'll get yelled at later, FPS. Accelerating how we operate as an open provider. We heard a lot about APIs. So analytics is in the same suite as the rest of FactSet. We are advancing our analytics API program. Anything that you can do across the portfolio life cycle can be done through APIs. And this wasn't just about putting basic APIs out into the market, which I think some of our competitors have done. This is really about opening up our APIs in a way in which, if you want to run advanced attribution, if you want to run advanced risk, if you want to trade and use Portware from an API perspective, there's an API development portal that you can get access to that allows you to do all of that in that environment. So -- It's also about content and the data warehousing capabilities that tie into Gene and John's world as well. But again, I'd encourage you to speak to the teams that are here today in more depth if you really want to push the boundaries on seeing what the APIs can produce. Another key tenant has been building partnerships. We've just publicly announced the relationship with BlackRock, where we're connecting our EMS capabilities to their OMS. Why did we do this? It was driven by client demand. Clients that were using BlackRock from an OMS perspective and Portware from an EMS perspective, said, "Can you help us reduce the burden? We don't want to own this. Can you guys partner together?" So that was the first of a few partnerships that were lowering across the plc. And we're true to our word. We want to be an open provider. So we're willing to work with other OMS providers, other EMS providers, other analytics providers across that ecosystem to really benefit our clients. And the momentum continues to build around the partnership objectives. Talked a lot about private markets earlier. One of the things that we're seeing within our client portfolio is a significant shift to the private markets, where clients used to hold institutional asset managers or even more importantly, probably in the shift is asset owners. We've seen them hold 3%, 5%, maybe 10% of their overall plan or their book in private markets. Now, we're seeing 10%, 15%, 20%. And as we see those assets come into those 4 million portfolios, the client's expectation is that we can treat those assets the same way we can treat any public asset in the portfolio. So in partnership with Kristy, in partnership with Goran, we've been leveraging the private market data that we've been collecting and using that alongside the portfolios. Additionally to that, we continue to push the advancement of our technology in regards to collecting of information in client portfolios. So clients are now going to be able -- soon to be able to send us private equity documentation, that we will parse that documentation and use the information in those documents to cover the assets in their portfolio. So we continue to push the boundaries on making sure we cover all of those asset classes across the analytics suite. So doing a little bit of an even deeper dive. Super excited to kind of bring this up today and share this. What you're actually looking at -- and Josh Cooper, who's in the room next door to us. He's ready to show this to anybody who'd like to see it if you haven't seen it already. But this is our new capabilities around portfolio management on the FactSet solution. And really, what differentiates a lot of what we're doing here is the cognitive aspects of what we're pushing forward to portfolio managers. In particular, there's a number of different insights out there. There's over 50 different insights that we run every single day. We can run those insights in real time. And based on the positions in the user's portfolio, we look at that, we marry that with the insights that we're able to produce, and we share news insights, transcript insights, momentum insights, and even alpha generation insights. Our recent acquisition that we made was of Cabot Technologies, smaller in terms of size, but important to us. And the reason why it's important to us is it's behavioral insights. We can look at a client's portfolio and say, how well are you doing when you're buying positions? How well are you doing when you're selling positions? What are you holding on for too long? What are you selling too soon? Look at the weight distribution of how much you're buying and selling. And give them some insights as to what their track record looks like and ways they can potentially improve their performance through this environment. So it's a different way of thinking about portfolio management. Additionally, not only is it about helping them outperform, but Phil mentioned it, it's about efficiency, right? When we think about fee compression, a portfolio manager may not necessarily have the same amount of time or the same amount of support to go look for everything that they need. So our objective is, through cognitive computing, push these insights to them through this platform. So when you think about it, it's as much about efficiency as it is about performance and even reporting-based capabilities. We're going to continue to push the boundaries here. This is going to go full multi-asset class. This is going to -- as we think about it right now, it's very equity-specific, globally equity-specific. But because of all the asset class coverage we have, we have the ability to bring this into the fixed income markets, impress even further in the months to come. So talk about some of the front office differentiation. Talk about what we're doing in the middle office in a little bit more detail. Through the BISAM acquisition and with the FactSet Performance Solutions, it really is about bringing an industry-leading performance solution to market. There are a lot of performance solutions in market today. I would argue that they're a little antiquated, if you will, in the essence of how they've approached the technology supporting them. In terms of cloud migration, our performance solutions are fully cloud-enabled. In terms of our ability to rest data and push that data into different environments that has also been achieved through the BISAM acquisition, right? And that's been an add-on solution in terms of our Vault capabilities. Additionally, we not only do the official performance and attribution, but we also offer the GIPS management. So clients can produce reports not only for internal purposes, but they can also produce reports for external purposes to inform their clients on how well they're doing or compete for new business through the performance capabilities. And the other element I'll hit on before changing gears here is the reporting aspects. So in terms of reporting, FactSet has -- it's a reporting solutions that have been in market for a long time. We did make an acquisition of Vermilion several years ago. And the idea there was to offer a full-on reporting solution where clients could use FactSet content and any other internal or third-party content that they rely on to capture the reporting workflows that they wanted to achieve for within their firm. Last deep dive. This one is -- this is our QRE environment, this is our quantitative research environment. And the way I would describe it is it's a programmatic research environment at the end of the day. It's not quant-specific. This is a hybrid environment. So we talked a lot about APIs and we talked a lot about the terminal in the essence of what it looks like. We developed this open ecosystem through Jupiter. This is a fully Jupiter-enabled application on the desktop. And then also within it, it's fully Python-enabled. So everything that you do in this application is done via Python. There's Python code along the top, right? This is just a quick sample set, and then you could see all the different visualizations of what you can do with the data. You can pull any data set that is on FactSet into this programmatically. You can pull any of the analytics, if you want to do back testing, alpha testing, portfolio construction, model generation that can all be done through Python directly in this environment. In addition to that, not only is it data-specific and calculation-specific, but you can also call components of the FactSet workstation right into the quantitative research environment. So if you want a company overview report followed by an estimates report, followed by an attribution report, you can programmatically call any other area of the application directly in QRE. I would say that, when we say it's a quantitative research environment, I think we're going to expand our horizons and think about it as being a programmatic research environment. We've got to get the naming incorrect to make it sound a little bit more exciting, but at the end of the day, this is something that we haven't seen any of our competitors do to date. And we've already brought it to market. This has been in market for several months, and then we can tell you that client adoption and user adoption is very positive. So what are some of the key takeaways? We remain committed to our portfolio life cycle strategy. We're going to continue to invest and grow within the front office. We see the ability to differentiate, in particular, with portfolio managers and traders, but we also see the ability to continue to differentiate in the middle office. Given the second component, given the amount of client data that we have on our system as well as our own proprietary data, through the leverage of cognitive computing, the investments we've made in digital transformation, what Gene and team have done, we have the ability to unlock client portfolio data differently than we did even a year ago. The third component is really driving efficiency in the middle office. And that really is that unified capability of performance, risk and reporting, all done in one environment, but all accessible through different means and different technology. We continue to invest in analytics services. This is a major differentiator for us. Not only do we have teams that watch the client portfolio data come in, watch the accuracy of the data, but whether you're a new client and a new logo that's coming on to the system that needs implementation support, or you're an existing client expanding into a new area. You may use us for performance and want to use us for risk. You may use us in the front office and want to work to the middle office. Having the teams and the resources and the technology to actually help you in that journey is a key component to our offering. And last but not least, is continuing to make sure that all the data that we're integrating into FactSet in terms of our collection efforts, whether it be private market data, whether it be third-party content is combined with the portfolios to unlock the full value of the portfolio life cycle. So with that, greatly appreciate the time today, and I'll turn it over to Kendra.

All right. Good morning, everyone. Nice to meet you. I can't even make the same jacket joke as Phil because he already took it. It's great to be with you here today. My name is Jonathan Reeve. I run our Content Technology Solutions business unit, or CTS. So we define CTS as the off-platform portion of our business that delivers our content and third-party content to our customers either via data feed, API, digital widget or increasingly, the cloud. CTS is the fastest-growing business unit at FactSet, really reflecting the industry trend for our customers wanting to consume data natively into their systems. I've been at FactSet for 2 years now, really enjoying my time. And previously, I held similar roles at both S&P and ICE. And I'm delighted to be with you here today to talk about some of the growth plans for CTS. So in doing so, I want to go over 5 key areas of growth that are important for CTS. The first of which is content. At FactSet, content is king, but data management is hard, and our customers are grappling with that and the capabilities that sit here within FactSet in terms of being able to help our customers, manage data or what they're looking for. Technology is also a key part of that transformation. You hear digital transformation all the time. Our customers are trying to grapple with what that means for them. How do we, who have undergone our own digital transformation, help them move to the cloud, leverage those capabilities and help them get to their own digital transformation faster and easier. ESG, I'll also touch on that. What we're doing in ESG, why we think it's differentiated and why it will make a difference in the industry. Real time. Real time is a very important growth area for FactSet, we have some very strong capabilities. It's an area that we leverage completely within our platform environment today, but we have a lot of opportunity off-platform with Data Feeds and APIs, and I want to share a little bit about that with you as well. And finally, and of course, CUSIP. We are only 35 days into this transition. It is going really well, and we want to give you a bit of an update on what's going on with CUSIP. So let's get a little deeper as it relates to the real drivers of growth when it comes to CTS. Content is at the heart of everything that we do. It provides that deep insight into our customers so that they can understand and better do their job. We have over 30 global data sets that FactSet manufactures, John talked about that earlier. And those data sets are deep and global. And as Kristy described them, they're differentiated because of the way that they're integrated and the way that we connect them together. And we do that in everything that we build from every data set, including the new one so that you can seamlessly travel across that content up and down and derive insight into the data we're displaying. So this includes our core data sets like fundamentals and estimates, but also, premier data sets like geographic revenue and StreetAccount news. But the world is thirsty for more data and FactSet is there, and we're building out new content. This includes private markets, deep sector and ESG. And it's important to note that when we build out these data sets, we try to approach that from a parity perspective. So regardless of the FactSet application, Goran and Rob were talking about the workstation or portfolio analytics from a CTS perspective, the same content is available in the CTS products as well. So that if you're consuming organization, regardless of which delivery mechanism you choose, you can have access to the same content that's been highly concorded, normalized and easy to use. And obviously, for our customers that have front, mid and back office, they can get some level of symmetry and consistency when they consume content from FactSet. So while we have a lot of content and we continue to build out content, it's a core part of the strategy and what we're investing in. We also recognize we don't have all the data in the world, and customers sometimes require data that isn't manufactured by FactSet. So this is why we have over 800 other data providers on the FactSet platforms. But we don't just serve that up independently not connected. All of the other third-party content is integrated through a data management perspective that allows you to also, seamlessly navigate across FactSet content and this third-party content, really lowering those barriers of data management. Phil talked about sort of industry trends earlier, where if you're an investment manager or a bank, you don't want to spend all your resources thinking about how to manage content. We take a lot of that burden for you by providing these curated data sets, again, of not only FactSet data, but this third-party content as well. So -- And the way we do that is through a process that we call concordance and that concordance capability, which I'll get into a little more on the next slide, allows the customer not only to have these -- the integration of FactSet data and third party, but also integrate it with the customers' data as well. Our customers are coming -- are asking us about technology, how do we manage data better in the cloud, and we're helping them with that transformation because of the transformation that we've gone through ourselves. Having that content be cloud-ready, and if you look at the various cloud providers, you'll see that FactSet generally, is the first content provider to have our content there, so that we can be there first when those companies are embarking on their digital transformation. It's simply a matter of, honestly, flipping a switch to make that content available within that client's cloud environment, very, very simple. And we have relationships with all the cloud providers that allows us to work not only on an engineering level, but also, on a commercial level. It's been talked about a lot, but we have APIs for all our content sets, as well as functional APIs that allow you to cut across content and analytics to provide that elastic view of being able to pull content in, and I want to get back to that elasticity in a second. And then finally, widgets. For those customers that want a more curated look of content, but don't necessarily want to create that graphical user interface themselves, we can provide modular widgets for someone that wants to build an application, create a mobile device or drive a website. And then the -- lastly, is around workflow solutions and how CTS takes it to the next level beyond, let's say, traditional, what enterprise data delivery would be. So traditionally, what might happen is their content would be dropped off at the customer's door and the customer would have to figure out how to integrate that, how to use that within their organization. We're going one step further with what we call Data as a Service. And that really reaches into the organization, understanding the use case of the client, understanding what the use type is. And so whether they're using it for enterprise data management, customer relationship management, a risk tool, all of those permutations and combinations, we have modular solutions that can fit that. So we can curate the content that's needed, the delivery, the frequency, using APIs, data feeds, the cloud and all the things that I've just listed to create that fit-for-purpose data solution for the problem the customer is trying to solve. So let's have a deeper look at the CTS ecosystem. So what we're showing you here is the FactSet content and the third-party content, again, highly normalized. Kristy described it as beautiful, and it really is. The world is thirsty for more content, and we have to get them more content. Our customers are looking to generate alpha or manage risk. And the way you do that is by more data. However, too much data not properly organized or usable, you drown in it and it becomes a problem. So you cannot underestimate how important it is to provide data that's usable versus just dumping it into an organization. And that's where we differentiate ourselves. All of this data connected at an entity level so that you can navigate from security, to company, to ultimate parent, over to their fundamental content, their performance data seamlessly navigating whether you're in a workstation, a data feed or an API. Let me go a little bit into Concordance so that it's clear what that is and why it's so powerful. So what I've talked about so far is managing the entities and linking the data at a fundamental level, so it's connected. Ultimately, any company is going to have their own security master, their own entity master. And for this to work, our data has to stick to the customers' data. So the Concordance, which is also an API, allows the customer to submit their portfolio or their universe back to us, and we essentially link our master IDs to their master IDs. And once that's done, all the performance data that FactSet has gone forward will link and flow through and power whatever application they happen to be talking to. So that's a key part of the value proposition. Next is the delivery. And I mentioned, delivery is increasingly through the cloud partnerships. We try to be there first. It is going really well. And the world has changed, even in the 2 years that I've been here in terms of the amount of our solutions that we're delivering over cloud. So as an example of that, the number of cloud solutions we sold in this time this year versus the same time last year has tripled. So to talk about the fact that the landscape is changing, and Kristy made reference to her beeper and all that kind of stuff, it really is moving that fast. And people are moving to this type of architecture, the cloud architecture. And we see that in how we're delivering content. It's no longer just a flat file being delivered into an organization. They are using the cloud, and that's why being there first is so important to FactSet. The other thing about the cloud is the retention, it's incredibly sticky. So we have a 99% retention rate of anyone who's taken our solution in the cloud. And by the way, the 1 customer that canceled just happened to go out of business. So for the most part, it's 100% retention for anyone that goes there, because it's their way forward technology. That's where they've decided to be, and this is the content they've decided to use, so it's incredibly sticky. APIs and endpoints, you see that consistently across the business units. It's a dramatic part of why we're doing so well. And I would sort of equate it to this. So the reason everyone is moving to the cloud is because usage is elastic, right? Customers don't have to pay for a server. They can have elastic compute or elastic storage. In other words, they only pay for what they use. And our API brings that same elasticity, right? You pay for what you use because it's consumption-based billing, which is what Gene talked about. So it takes that elastic value proposition from the cloud and extends it with the APIs. The last thing I want to talk about is, as if all of this wasn't fantastic enough, we also have something called data exploration, which is a sandbox that allows the customer to try before they buy and figure out which of this content, which of these tools are actually useful, so that they can experiment with all of that capability. So this is called data exploration. We have it on Snowflake. It allows access not only to the FactSet data, the third-party content, for anyone to play around with. I highly encourage you to go visit Sonia over in the demo area, and she will show you data exploration. It's quite a powerful tool. So all of this comes together and then it comes really about partnerships with enterprise data platforms, application developers and other functions, such as CRM providers, which Goran touched on. So it's a very engaging value proposition, because it's not only the power of FactSet's data, the way we link it, but we partner with so many other firms, recognizing to do that, we aid the integration with our clients, and we make their life easier. So let me dig into ESG now. This is obviously a very important data set. I mean, it is no longer alternate data. It is mainstream dataset. Analysts require this content to do research. Whether it's for research or to meet some regulatory requirement, it's super important content. And FactSet differentiates our ESG data in 4 ways. The first way we sort of manage that content is what I call inside out. So that is the self-reported content of the company. So this will be in their reports. We leverage our fundamental data collection capabilities and extract what the company is saying about their ESG state and put that in our systems, and that's the inside out content. And that is -- that's data that we collect and make available through our platforms. But that is only what the customer is saying about ourselves. We acquired Truvalue. The reason we acquired Truvalue is because it provides what we call outside-in perspective. So what is the market saying about that company. So we source over 1,000 news and other validated providers and we look for information about those companies, about the ESG ratings of those companies from an outside in perspective. So as an example, and I highly encourage you to go meet Eli in the demo area who can show you the ESG data. As an example, you'll see a chemical provider that another ESG provider rated their highest rating, but we actually captured news stories from various state websites that say they've been charged for dumping chemicals. And so the combination of this inside out, what the company is saying about itself, plus what we capture from these new sources, this outside in, provides you that 360 view about what's actually going on. And of course, it's all concorded, and this is where the third step comes in. So recognizing, again, that while we have a lot of content, we don't have it all. We also integrate over 40 other ESG providers. So if you want to now take an assessment of what FactSet is saying and what the other ESG providers are saying, have all that content normalize and integrate it, and perhaps look at what everyone is saying, perhaps create a composite score. All of that is made a lot easier for you through the way we manage ESG. And then the final and fourth differentiator from an ESG perspective is how beautifully this ties into the other FactSet data sets. So we have that FactSet data sets like sanctions, right, that tell you what's going on in terms of which companies and which countries have sanctions on them. So you can imagine how useful that could be given what's going on today, things like StreetAccount news, geo revenue, how much revenue is such a company retrieving from Russia right now, all of that stuff can be very useful and you stick it all together. One more point I want to make about the outside-in data. The inside-out data is collected when the company files a report, right? Typically, could be quarterly, could be semiannually. The outside-in data from the news -- from all these news organizations is 24 hours a day, 7 days a week. So think about that from a timeliness perspective, when you're going to start to see movement on those ESG scores from the self-collected data versus the outside-in data. It makes a really big difference. So the next is I want to talk about real time. So when I joined FactSet 2 years ago, I think real time was probably the biggest surprise for me in terms of the breadth of the capabilities that we have here. And if you think about it, the workstation and PA have huge real time capabilities, over 250 global exchanges plus a number of OTC providers. But really, we haven't capitalized on that for the data feed space, very small business there. And so the opportunity for us to leapfrog our competition as it relates to the level of technology we use in real time is tremendous. It's a massive part of the market, as you know. And our infrastructure is all now cloud-based, first provider to have a ticker plant in the cloud. And also, global distribution, again, leveraging cloud technology. So the benefit to customer here is you're going from a solution that had massive hardware requirements, data center space in terms of a total cost of ownership to essentially, a 0-footprint opportunity to deliver content via the cloud at a fraction of the cost, leveraging where the industry is going and where our customers are going to be anyway. So it's a very exciting space. It's one of our investment areas and a really big opportunity in FactSet. And again, all of this ticket plant capability sits at the heart of the FactSet workstation and PA. We're just re-monetizing for CTS. Finally, I just want to touch on CUSIP. It's a pleasure to be managing CUSIP on behalf of the ABA. I'd like to report, so we're only 35 days in and -- like, the integration has gone really well. 100% of the employees came over. They're all up and running. You can talk to Scott over at the CUSIP booth, who leads that business. And I think if you talk to the employees, they're all up and running. They all have PCs. They're all working seamlessly and it really was quite a seamless transition. So while -- Phil mentioned this was our largest transition, I think, in terms of execution to all the departments around FactSet, including HR and finance and legal, it was really brilliantly pulled off. And obviously, there's a lot to do, but we're very excited about having them in the house and it's a privilege. This is my third run with CUSIP, so I'm excited to be working with them again. So a little bit about some of the value standards that CUSIP works under. So first of all, CUSIP is a global standard and participates on many industry and market boards. And the reason they do that is they need to understand where the industry is going so that we can innovate and build new products around those requirements. CUSIP has identifiers in over 30 sub-asset categories, so it's not just fixed income and equity. And the reason they have 30 is because they stay ahead of the curve in terms of where the industry is going and be ready and available from an identifier perspective so that they can stay current and provide that solution. They are a key part of the management and operation of ICE and LEI, and also, a member of the Derivatives Service Bureau. So the second tenant is around the expansion of identifiers, and there's a number of conversations we're having with industry bodies around the world where there are new -- potentially, new opportunities to come out with some of those identifiers. Things we've done recently include digital tokens with a partner called Templum, which is a unique ID for tokenized assets. And we're also looking at opportunities in the ESG space for CUSIP as well. The third value tenant for CUSIP is all about protecting the CUSIP IP. And so we want to be very transparent, offer a fair and level playing field. So a lot of the CUSIP methodology, as it relates to pricing and how we go commercially with that is available on the website and making sure that's consistently applied for all similarly situated companies, is a core part of that value proposition and will continue to be so going forward. And then finally, is around thought leadership. So this -- the world is changing. We've talked a lot about how the world is changing as it relates to technology and content. And so thought leadership, from a reference identifier space, is really important for the CUSIP business. So again, we can stay at the forefront of that and then innovate around those new ideas when they come up. So in terms of product innovation, what we've done so far is we brought product teams together to talk about some of the potential ideas for product expansion or identifier expansion. And those sessions are going on. And ultimately, using the product management process that Kristy highlighted in the product management section, we will move that through the life cycle and those good ideas, right, will end up coming to market, and we'll have more on that a little later. Over time, and I want to summarize by saying -- so these are sort of takeaways. So organized content is a differentiator for FactSet. Our open approach both to content and technology, we think is differentiated, and we think we do open better than anyone. Embracing the digital transformation as a megatrend, bringing our services to cloud with our customers and that robust partnership strategy will continue help maintain the growth trajectory for FactSet and CTS. Our ESG strategy is truly differentiated through those 4 dimensions that I explained. And we're really excited about real time, you'll start to see a lot more, but this -- leveraging the cloud and lowering the total cost of ownership for customers that are using that real time solution, we think is very exciting. And then finally, for CUSIP, you'll start to see us participate and come out with new concepts around either new IDs or new product concept shortly. So with that, I'm going to wrap it up and invite my colleagues -- invite Kendra on stage.

And your colleagues.

And my colleagues. Give you the control.

[indiscernible] furniture.

Okay. [indiscernible] one looks so tall.

[Operator Instructions] So I will start with Manav.

Thank you. It's a broad question for the 3 of you. A lot of the new initiatives, new areas growing into, it sounds like a lot of, at least, your traditional competitors, some of them cover, talk about the same thing. So I just wanted to understand how each of you look at your competitive landscape. And as you're doing these new things, are you seeing new competitors than just the traditional ones that we've historically associated with FactSet?

I think, for me, a lot of the differentiation comes from what I've spoken about with open and being very cloud-forward. If you dig a little deeper in terms of what I was talking about, like the reference data layer that sits within FactSet that makes all of this content so consumable, when you provide that to a client, that ease of management goes way down. But that openness also includes like, we will have all of the identifiers -- the key identifiers from all of these, what you call, competitors, but to some extent, they're partners or -- And so the open approach allows us to have that other participants content on our system. So even if they're using, potentially, a competitor, we think if you use our reference data backbone, even with that competitor, you gain significant data management advantage.

And I think competitively, we feel quite strong. In many areas, we have competed in break offs and continue to win against our competition. I mentioned in terms of the retention rate that we have seen an increase. And maybe -- I'm not sure how this is going to sound to you, but it's one thing to talk about and it's another thing to execute on some of these technological advancements, and we have seen significant difference in practice between what we do and what our competition does. New competitors. I mean, we'll always look at what competition does, who may be coming up or if any of our competitors are moving in some of the segments that we currently own a significant share of. And we're not -- I wouldn't say there's anything of note that I would point at this point in time. So in general, we feel quite strong about our competitive position.

I would say it's also continuing to innovate on what we do well already, right, from an analytics and trading perspective for a moment. When we think about where we stand with attribution, risk and analytics and then we think about what we want to accomplish in the performance space to making sure we continue to evolve those differentiating products at a rapid pace, right? I think we believe we do differentiate relative to our competitors there. But we need to remain relevant. So it's continuing to push the boundaries with attribution models, continue to push the boundaries with technology in the cloud, and how we store data and leverage data. It is unlocking the client portfolio. It's hyper-personalization, I think, is something a lot of our competitors are trying to achieve. And when we think about what we're doing around the signaling capabilities and pushing insights to our clients, it's nothing new. I'm not saying anything radical here to the audience, but the question is how do we do it better than others. And that's what we're really focused on.

Just one more thing. I think -- Sorry about that. The service that we offer. So it is not just plopping an offering on some of these desktop, but what you do day in and day out to support those clients. And I do think that we have the best service in the industry.

Actually, one more thing. So like the strategies are connected, right? So we talked about private markets, we talked about ESG, but they're very much -- they're not done in a silo. So for example, we are building ESG scores, someone asked earlier, like, what's differentiated about your private market strategy? We're building out those ESG scores on our private market. So you get the obvious value prop, not with these projects independently, but together, right, so now, we can offer daily ESG scores on private companies right? And so you get to a level of sophistication that's really hard to match.

Question from Toni.

This one is for Goran. Just putting wealth aside for a second, research was really growing 0% to 1% annually. What was different or what changed last year that really sort of kick started the growth there?

So we were growing at a low percentage of rate, about 3 years ago, we're -- 3 or 4 years ago, we were at 0%, then that increased to 2%, 4%. So it hasn't been a dramatic jump. It has been an improvement. And I think the investment in private markets and deep sector have enabled us to accelerate. So I think that's certainly what has helped us quite a bit. But the improvements, over Kristy's tenure managing research, we have seen consistent improvements year-over-year. And obviously, we're having a very good year at the moment.

Kevin? [indiscernible] your next questions.

Rob, you talked a lot about front office, middle market, middle office, obviously, not so much on the back end. What's the strategy there, particularly given it seems like you're starting to go more down market, where maybe, clients would want more of an end-to-end solution? Do you build out back office? Or is that more partnership organically, inorganically or just...

No, it's a good question, Kevin. In terms of what we're thinking about in the back office is, there are a couple of partnerships that are underway right now in terms of IBOR capabilities and how we go further into the IBOR and ABOR space, which we'll be -- which we're working on actively. The second aspect of it is around our asset service strategy. So as we talk about those 4 million portfolios on [indiscernible] basis, a lot of those are coming from the leading custodial banks in the world, right? So we tie into most of the leading custodian banks, and they've been knocking on our door saying, how do we partner further? Well, how do we do more with FactSet. You now have more -- you have front office capabilities, you have middle office -- you have front office and middle office capabilities. Can you help us service our clients. So now, we're expanding those partnerships to say, okay, you're accounting services, you're back-end services, how do we further collaborate so that we don't have to work our way into accounting, for example. So it is through partnership, Kevin, primarily.

Question from Ashish.

So maybe, a question, how do you -- like, expanding beyond your core customer base? So maybe, JR, for you, on the CTS side, like, what percentage of your customers are quant versus a more traditional asset managers, both hedge funds about long-only asset managers. And how do you expect that to change over the next 5 years, particularly as you make it much easier, the cloud distribution makes it easier and API makes it easier to consume the data, how do you expect that to evolve? And maybe, the same thing on the analytics side, like following up on Kevin's question, pushing analytics more into the wealth side and are there bigger opportunities on that front as well. So maybe, expanding beyond your more traditional customer base?

Yes. I mean, thank you for that question. I mean, that is basically the core of the CTS strategy. So traditionally, where CTS found its niche was particularly, in that quant market, right, providing a lot of curated history to do back testing. But all of the content that we just described is really useful in that mid to back office space. So if you're running a security master or an enterprise data platform, like that content is perfect for the back office. And that's why we've added more reference data, added more pricing so that we can -- so we can move into the back office. It's a massive part of the industry. And I think when we think about the firm types that Goran went over, you have to draw a line across them and think about the front office, part of that firm type, and then the back office, part of that firm type. And that's what I'm really looking to, not only shift our products, but also, shift our attention from a sales perspective to go and have those back-office conversations as well.

When I think of applications, like our work that we're doing on the programmatic front, we're seeing a shift already that traditionally, programmatic would resolve -- you reside in the quantitative area of the business or within a hedge fund. And now, when the largest banks and asset managers in the world are coming out saying that everybody, financial analysts, portfolio managers, middle office functions all need to be able to code. We're seeing the world kind of shift a little bit on us there in the essence of, okay, it's not just having programmatic or quantitative analysis in a specific group, it's carrying across the broader organizations across institutional asset managers and asset owners, for example. So we really do see things like our QRE reapplication and programmatic access, helping us open up and expand in terms of the current user base, but then particularly, hedge funds are a large segment, particularly for us, but hedge funds are now knocking on the door more about the programmatic capabilities and seeing the data and the accessibility. So those are 2 areas where I'd say there's expansion. Goran, I, Gene and many others partner very much on the wealth side. And we think about bringing the institutional asset managers and asset owners, risk products further into the wealth segment. And things like the Advisor Dashboard and carrying that through. And in particularly, too, we're seeing institutional asset managers push further into the wealth segment of the market, right? They're looking for fund distribution, they're looking for model creation. And as we're doing that, it's -- Goran and I are meeting kind of in the middle to service that segment. So a lot of opportunity to bring risk there, simplified risk, and then even things such as like tax harvesting and tax capabilities, which you can optimize through a risk framework, which would reside in analytics, but definitely benefit the wealth segment of the market.

If you think about -- Sorry, if you think about the obvious next steps for us in wealth management, so you take the Advisor Dashboard, and then if you think about asset allocation, portfolio construction, rebalancing next best action, those are all natural next steps for us to develop. As we develop that, that's -- I mentioned in my presentation, that space is 3x the size of what we service today. So we are in a $2.3 billion space, the PMS base is $6 billion as we expand our capabilities, we can address a much larger market share going forward. And that's using all of the tools and combination of the [indiscernible].

I'm going to take a question from our online audience, so this is for you, Jonathan. It sounds like CUSIP will be 100% run separately from the legacy FactSet products. Anything we should be aware of and how you will run it differently than in the past to potentially accelerate revenue growth further?

Yes. I think the operating framework of CUSIP is, as we described on the previous investor call, right, it reports into CTS, but it is run separately. I think in terms of what we want to do differently, we're having these conversations around where we can either expand product coverage or expand growth of industry types. And obviously, there's a lot of brainstorming on that. And I think we're pretty excited about some of the options out there. And so we want to be -- I'm fairly bullish about some of the product ideas, and so I don't know if that's different, but I think it's going to be an interesting time when we come to market with some of these concepts.

Wonderful. [ Faiza ]?

I have 2 questions, if you don't mind. The first one is for Rob. Rob, how do you think about sort of market size, your market share? And what's the right way to think about that going forward? Like, do you have to displace a competitor? Are you finding that a lot of your customers, clients, users are sort of using more than one platform? And is that an opportunity going forward?

Yes. It's a great question. Thank you. I would say that's part of the rationale behind the strategy for the portfolio life cycle for the past several years. It's being able to expand our footprint in institutional asset managers and asset owners. From a competitive perspective, I would say, when we talk about execution management, trading capabilities, our presence there and our investment there is one of the industry-leading presence, right? So I think we're doing very well and growing within the institutional trading space, and we continue to invest there fairly heavily, I would say. In the middle office, again, on the performance side, we saw an opportunity through the acquisition of BISAM and given the capabilities of portfolio analysis, to really grow market in the performance area, even from a competitive perspective. So I would say we see trading and portfolio management capabilities as greenfield opportunities, while we work to continue to widen the moat in the middle office around performance attribution and risk.

Great. Just -- My second question is just more of a conceptual question around usage-based fees. And I'm curious if that's just something that's more on the content and technology side. And sort of how do you -- under what circumstances? Is that the right approach? Is it the right approach when you're trying to gain access to a new client? Is there an opportunity to do more sort of, I don't know, fees by feed or enterprise-based pricing? Just conceptually, how should we think about that?

I mean, the way I think about it is that there's a ton of value in our content. And regardless of the use case, whether you're a risk manager or portfolio manager, there's a ton of viability and capability in our content. And so we're -- we have a lot of tools that need to demonstrate to our customers that they can actually make their workflows easier. So I described to you, for example, data exploration, which is a sandbox where people can play with all the content before they buy. And I think that very much ties into an API. So let's say you're not sure whether something is useful, but you want to try it out hypothetically. You can take an API at a low usage band and experiment with it. And then if there is usage in your firm and you want to adopt it more broadly, then you just move up to another usage band in the API. And so it allows people to, I guess, have a sip of water rather than sort of having the whole firehose right away, if that makes sense.

Any other questions in the room?

Keith Housum, Northcoast Research. Just expanding on that question a little bit. You guys are doing a lot over the past several years in terms of providing unique access to data and saving your customers money. Are there other vehicles for building that you guys are doing in order to be able to capture that? Are you be able to capture some of the savings that your customers are generating in terms of their efficiencies? I'm just really trying to expand beyond just, I guess, your historical building that you guys have done from a per-seat basis or an enterprise basis. Just anything you can provide in terms of context from billing and pricing?

I mean, I'll take it from a CTS perspective. I mean, there are several commercial models, right? So the API model we just described is a usage-based billing. There's obviously, for someone that wants an entire data set right? You can get sort of what I would describe as enterprise usage, right? And so you can take it in various either enterprise bundles where you've got access to everything or usage-based billing or you can have components like digital widget. So the pricing -- like module is pretty flexible. And then I'll let my colleagues talk about the workstation.

I think some of the efforts that we have put in, I think the Helen has put in place over the past couple of years is really, our B2B program, so price to value. So I think what we have done is simplify our Chinese menu of offerings, really define prices by user segment and have been very disciplined about it. I think that's also resulted in some of the better price realization from our deployments in the last 2 years and more consistency across various users. So I think that has been very, very effective. In some of the larger deployments, there are enterprise-type deals. And I think from our perspective, it's important to have consistency and avoid some of the fluctuations in seat count. So we have approached it from that perspective on some of our large deployments and are seat dependent per se.

Just adding on to a little bit, do you think it gives our clients some optionality, right? When just thinking about some of the things in analytics, in particular, there are certain models and certain levels of testing that you want to do outside of the FactSet framework if you're an analytics client, other users can test in different environments and in different ways. So depending on the use case and what they're trying to accomplish, the API programs for example, give you flexibility as well as the programmatic access.

With that, I want to thank JR, Jonathan, Goran and Rob for joining us in talking about our workflow solutions, and we'll take another quick break. And when we come back, we will have a conversation about our culture. [Break]

And our people. I just recently celebrated my 23rd year at FactSet. Yes, I started when I was 5 years old. And there's a lot of us in the room, many people have talked about having multi-decade, multiyear careers at FactSet. So I'm not an anomaly, and I think that's really something special about our culture. And that's a key reason that what keeps people here. Especially, as we transition from the pandemic, How We Work is very critical to who we are and how we're able to continue to succeed. And to that end, we developed a model that we actually call How We Work. And when you think about How We Work, it's about more than preserving the flexibility that allows us were able to enjoy as part of the pandemic. That's very key. That flexibility is key, but that's just a small part of it. How We Work, the root of it, is really about how we drive innovation, how we drive to retain talent, how we promote creativity and how we collaborate with one another. It is truly the evolution of our culture and a key reason that I think we're going to be successful, that I know we're going to be successful, with a lot of the things that we talked about today. So Dan, I'll start with you. Can you talk about the How We Work model and how it helps us attract and retain new talent?

Absolutely. However, before we start, Kendra, what I would like to do is just take a second and say that I fully share in your enthusiasm as I complete my 24th year at FactSet. And I am very thankful for the support as I continue my journey and the opportunity to work with tremendously talented and collaborative global FactSet family. And now, to answer your question. How are -- How our model, How We Work supports our ability to attract and retain talent is straightforward. We provide the maximum flexibility allowed to our employees. And then we trust our employees to make a decision regarding the work paradigm that they feel is best for them, for each one of us, for us to be our most productive self. We recognize individuality. We understand that people have different needs. We understand that one size does not fit all. And that fits in very well with our belief that the best ideas can come from any person, at any time and in any place. But let's delve a little bit deeper and, Vinay, if I could ask you, how have you seen How We Work that model impact diversity, equity and inclusion?

And thank you, Dan, and absolute pleasure to be here with everyone today as well. Diversity, equity and inclusion, integral, absolutely integral to How We Work as it ensures that we are an employer of choice. It ensures that we contribute to our client's success, and it also has a positive impact on the communities in which we operate well. And this is to our 3 strategic identified areas of Workforce, Marketplace and Society as well. And I'm particularly proud and excited for our diversity, equity and inclusion strategy as well because what it also does is it also promotes that diversity of thought, that cognitive diversity. So that means that we can continue to provide the most innovative, the most creative solutions for our clients as well. I'm thinking of some of the actions that we're taking as part of our diversity, equity and inclusion strategy as well. First of all, as part of our active visible leadership commitment, we have created a global Diversity, Equity and Inclusion Council. We're also members of the CEO Action and also the CEO Action for Racial Equity as well. And we're also being transparent. We're also being transparent on our workforce demographics, which are available in our sustainability report, which I'd encourage if you want to take a look at the kiosk around the corner as well, as well as publishing our federal EEO-1 filing as well, so that is part of transparency and accountability. But we're also in partnership embedding diversity equity and inclusion into the way HR works as well. Looking at, for example, the way that we promote and the way that we rate performances as well. And we're also widening the gate through targeted outreach programs as part of our recruitment and talent acquisition initiatives. And we're doing all of this whilst we continue to educate within the organization or flagship programs such as unconscious bias, racial justice allies, whilst engaging everybody through our very active business resource groups, for example, our Black BRG, our Latinx BRG, our Women's BRG, just to name a few. But our actions don't just stop there. Our actions don't just stop within our four wall, weather and beyond, so we've created a supplier diversity function and we're also leveraging our corporate voice as well to make a positive impact. And we are so proud to join over 200 organizations, including many of our clients, in fact, as well to sign a business statement opposing anti-LGBTQ+ legislation being proposed here, right here in the U.S. as well.

And I can definitely speak on behalf of myself as a very proud member of the leadership team of our Black BRG. As well as at FactSet, that it really has changed the engagement, which is really important over the pandemic. Vinay, can you walk through some of our DE&I goal and how that reflects the way we work?

Sure. Absolutely. And our big picture goal, our big picture goal is absolute. It should be fully representative of the communities in which we operate and the clients that we serve. And I fully acknowledge we're not there yet, though. And however, by intentionally executing our diversity, equity and inclusion strategy, we aspire to absolutely include -- better include underrepresented groups within our organization. But we will continue to keep everyone updated on our progress by continuing to increase transparency and reporting on our progress in our sustainability report every year as well, and we'll also continue to also hold ourselves accountable for the journey for our DE&I journey as well. And so we have partnered with MLT to achieve Black Equity at Work certification whilst maintaining our existing accreditations. For example, our Fairygodboss Award for Best Company to Work For, for Women as well as our perfect 100% score with the Human Rights Campaign on the Corporate Equality Index as well. And I'm confident. I'm confident in our DE&I journey as we continue to invest in the resources necessary to deliver our commitments as well.

Wonderful. Now Dan, bring it all home for us. How does this connect with the strategy that we've heard about today?

It aligns incredibly well. Our growth mindset is to recruit, train and empower a diversified workforce that is focused on delivering next-generation workflow specific solutions. It also ties very well with our strategy that we heard Phil talk about earlier, which is to create the leading open content and analytics platform that delivers differentiated value to our clients. This same open platform, this ecosystem, so important to our clients and to the market, also encourages and facilitates our technical talent to learn and experience with new technologies, to learn new database technologies, to learn new programming languages so that as they continue in their career, they continue to advance the skills that they have, the tools that they have as individuals, which allows them to not only provide the solutions for today, but the solutions for tomorrow. Additionally, we also, within our organization, culturally promote learning by providing dedicated hours for every single employee in the company. The jobs we have are demanding. They require a lot of time and investment. To make sure, however, that we're not investing our time only in mastering the skills that are in front of us, but taking time to develop our careers and making sure that we're building on those, then we have dedicated time provided for every employee to enhance their knowledge to build different skills that are going to allow them to continue in their careers. This is augmented by other programs we have such as our Hackathons and Chaos Engineering.

And what is Chaos Engineering?

Chaos Engineering is an interesting investment in promoting stability. So what we do is we provide our technical talent systems access in a sandbox environment, and then we encourage the talent to challenge our system stability. So perhaps through a systems hack, perhaps through an unusual -- a typical upload of content, whether they're working individually or working as teams, what they do is they try to find any potential vulnerability within our systems. And then if any is detected, we work to make sure that, that is solved so that it is addressed. We focus on our commitment to quality, further strengthening the value that we provide to our clients.

Wonderful. And I just want to close on one theme that Vinay hit upon is that we did release our 2021 sustainability report. As Vinay said, we have a kiosk over in the corner where I encourage you to take a look. But Dan, can you speak more about our role as corporate citizens?

Absolutely. We encourage every employee to participate in a myriad of activities that we have globally available. They're afforded through our outstanding corporate social responsibility team. Our employees understand the value that work is important, but there are other things besides work that are also important. Similarly, as an employer, we're looking for talent that not only helps us to maximize productivity. We're looking for talent that recognizes and embraces that making a difference extends beyond the jobs that we do, and it actually moves into making an impact into the communities in which we work as well as the larger world in which we all live. And I can share with you that it absolutely brings a smile to my face, as I remember the opportunities that I have had. Whether it was working to alleviate food and security in Manila or to inspire the next generation of leaders in Hyderabad or in helping to protect their environment in the Americas. The opportunity to work with different FactSetters around the globe, to work with like-minded individuals, to work with community leaders allows us to really show that we are committed to making a difference, and as a company, we care.

Very well said. I think I'll close on that, and I want to thank Vinay and Dan for joining us today.

Thank you.

Next up, we'll have Helen, who will talk about our sales strategy.

I guess I don't get to set, so. It's really great to be here with all of you live and in person. I do have to admit, though, that 2 weeks ago, I got an invitation to go down to New Orleans for the NCAA finals. And I asked, what was the date again? And I have to also admit that I took about 30 seconds for me to think through. Can I make it out of the rehearsal, fly down there and make it back in time? And I decided, duty calls, so congratulations to the Jay Hawks and the Tar Heels. May some of them come join the next as I'm a long-suffering Nick fan and bring some of the winning ways. Please. But what I'd like to do in my section here is to sort of bring together a lot of what my colleagues have spoken about as it relates to our strategy and our investments. As it relates to the solutions that we're bringing to market as well as the great FactSetters that make it all come together. And what sales does is that, therefore, bring it to life for our clients. And so that really starts with our sales strategy, which at its core, I think, is quite simple. We live our mission, we know our clients. And with that, we can execute with excellence which allows us to win with quality, and that's important. Not just the quantity, but the quality. And then lastly, with that, I believe that I've got great confidence in our ability to grow. I'd like to go to where we started off with Phil, which is our purpose to drive the investment community, to see more, think more and do its best work. And that's critical because that leads to what sales is meant to do, which is to deliver value to clients tailored by market or firm type. We've talked about how we create solutions by firm type or, in some cases, by workflow. And so we think globally, but we go to market locally, and that's important because it allows us to therefore understand what clients needs, what the market needs and tailor it as needed. It's one of the reasons, for example, very simply how we ended up investing in the Street Account Canada and Street Account Asia. Or in the way that we cover from a global perspective for multinationals, we will have, say, a global sales executive as well as local sales reps because that is how we have it by in-country and how we ensure that we're bringing the best to FactSet. So what you see essentially is that it helps bring to life our solutions and directly to our clients. And that's important because we must know our clients, and I'm going to double-click here to talk a little bit in more specifics around the firm types around the buy side, sell side and wealth. Now, what you see on these bars is currently how clients buy from us today. And if you look at where we are established leaders, Hedge Funds, Asset Owners and Asset Managers to start with on the buy side, it's not really a surprise to see a lot of light blue there because that's what they do today with us on the Analytics and Trading side. Clearly, on the research and advisory, that's really been the mainstay, and our retention there has been very strong. In particular, over the next -- for the last 12 to 18 months. But what we see underneath is the dark blue with Content and Technology, which is growing at double digits. And so when we think about where does that -- what are the drivers here, we take a look at how those firm types, what they're buying today. But what's also important is how are they looking for tomorrow? And that's where the knowledge is so critical. If I take a look here on -- generally, what does the buy side need? They want differentiated content and they want to have productivity. But each of them still have something more specific that they're looking for. So let's start, for example, on the Asset Manager side. ESG, top of mind for sure, and JR talked a lot about the differentiation that we bring to the table, and so true value certainly helps us get there with that outside in. They're not the only ones who need that. Asset Owners are very keen on that as well. There was a great win that we had in Asia Pac with a sovereign wealth fund, a very sophisticated one that really bought into the philosophy of that outside in, how that complements the rest of the ESG solutions that they currently have. But for the Asset Owners, it's really quite important to think about the fact that what they're really looking at is diversification. We talked about -- Goran talked about that sort of private and public and being able to see things together, and that is quite key, and that's why private markets is so important to them. But another important piece of it, quite frankly, is the fact around what we have with Cabot because they want to be able to measure their asset managers' performance. Not just whether or not that they're doing against the benchmark, but are they making the right decisions? How are they making decisions? How consistently are they making those good decisions or bad decisions, and how can they change their behavior as a result? And then hedge funds, of course, for them, speed is so important. They're always looking for whatever the data sets that are needed across all asset classes to be able to give them that one advantage. But what's important to them also is that flexibility, and we can do that a lot with our Quant tools. If you want to do it through on platform, you can do that through alpha testing. If you want to do it off-platform, feeds and APIs. If you want something that's hybrid, as Rob talked about with our QRE, Quant Research Environment, you can do it through that tool as well. So that flexibility is what's going really well and resonates for hedge funds. Banking. We're one of the strongest in that, and it's so well-embedded into the business that they do -- that the analysts do. And quite frankly, we know that for the -- from banking clients, what they care a lot about is efficiency for bankers and of course, idea generation. And Deal velocity is what we do a lot now in terms of what's helping them as it relates to signals and APIs. And that has been a great growth. We've talked about the fact that we had 16 renewals, and actually, what he didn't talk about was the new wins that we had, especially in the middle market. But those are where we are more established. When I think about the firm types of which we are more greenfield, quite frankly, that just tells us that we've got a lot more runway. I'll start with PEVC, Private Equity and Venture Capital. What's key for them is that idea generation, sourcing, and so our private markets also helps a lot on that front of giving that new idea. So these are all investments that we've done over the last 12 to 18 months, whether it's through acquisition or whether it's through organic buy. But the portfolio monitoring is really important because GPs these days have to be able to provide and centralize that information to the LPs. And they want to do it in a way that goes beyond doing things in Excel. And that's where Cobalt is such a powerful tool for them, and that is driving a lot of our new business as well as we go to market. When we think about where we're getting the most number of new clients, it comes in Wealth and in Corporates. Now in Wealth, quite frankly, what we hear from them all the time is that they need more engagement. Goran talked about a fact of one of the stores from one of our clients, which basically said that with this tool, the Adviser Dashboard, that he would expect to see at least 20% of productivity improvement. Now, I don't know that many tools out there that can provide 20% of productivity improvement. At one of my first client meetings, the client couldn't stop talking about how the deployment went so well, and quite frankly, that's their new benchmark that they were going to do for all of their other partners going forward. I was sort of hoping that meant that all my client meetings were going to go that way. That's not always the case, but that tells you how passionate they feel about the benefits that brings. And then if I go into Corporate, that is very much of a long runway for us. That's been a lot of the driver of our new business. We would expect that going forward. And for them, it's very much about the C-suite, around corporate development. Quite frankly, not only IR, but Sales and Marketing, and that growth is coming quite quickly. In particular, when you think about Deep Sector, our acquisition in BTU Analytics in the power space is emblematic of the benefits that we're bringing to our clients. And then lastly, Partners. We've worked with many of them for a long time. But as JR talked about, tons of data and no connection really doesn't really -- doesn't bring much to the table. So our ability for data management solutions and APIs, it's what's driving the growth. And you can sort of see that on this chart here where that's where the dark blue is, and where a lot of it in the newer growth areas where there's lots of green. So as those firm types grow, that's how we would see a lot of the growth come amongst the -- underneath on the SBUs as well. So knowing our clients is critical for us to be successful, and that is our competitive advantage. But we must also execute with excellence. So we tailor our solutions to our client workflow, which we talked about, but we also go to market by firm type as well, and that's a relatively new change. So that goes throughout the entire process from who we target in business and marketing through business development. Pre sales, direct sales and then ultimately, how we cover from a client solutions and consultant perspective. That's why we know our clients well. That's how we're able to do the complete cycle and give information back to our product developers so that they know what issues have to be addressed. But it's important that we think about that we can't be all people, so we have to prioritize our clients as well. So the graphic here is around Client Segmentation. So that depending on the complexity or the size of the client, well, quite frankly, the opportunity that exists. We need to make sure that we face off against them appropriately as well depending on potential as well as penetration. And because we have now a very -- a more standardized way of looking at our packages and our solutions by firm type, we are able to tell our story with greater simplicity and clarity and talk about the value. And with that value comes the ability to be able to reflect higher pricing or capture the values, the way I would prefer to call that. And you've seen that in our annual price increase as well as our price realization. But what we're known for best, as Goran talked about, is our client service. And so we want to delight clients with dedicated support, well-trained folks as well as a workflow knowledge. Now, that's important because when someone has a question, we're not just giving them a point answer. We know their workflow. We know what their other peers do, and so we're able to help talk with them about how to use what we have in that much more of a fulsome way. And so that execution with excellence is what leads to these numbers which is around winning with quality. And the reason why quality is so important is it helps build on and give sustainability when we want to grow overall. Let's talk about existing clients, 95% plus on ASV retention. We ticked up last quarter to 92% on client retention. And we do surveys as we -- off of our client support desk, we're at 93% plus on the client satisfaction. And trust me on that 7% that we're not getting the score that we want, there is a swarm of folks who then go through and say, where is the issue? Is it a product issue? Implementation? Is it on the client side? Because we want that score to go up. And I think when you put those together, what I think is terrific is the fact that over 60% of our ASV come from clients who buy from all 3 workflow solutions. That means that we're expanding once we have the client. And as a result, we have long-term relationships over 13 years on a weighted average basis. So the light blue bars that you see here reflect that growth rate with existing clients, but that's not going to be enough, and that's why new clients are so important to have as well. We've had a 10% growth rate over the last 3 years of new client growth in terms of numbers. And they, in year, are contributing nearly 30% of the growth rate. And that's what you're seeing here on the dark blue, and you can see how that sort of is accelerating over the last 6 months. And that's important. Why? Because we've shown that once we have a client, we hold on to the client and we expand with the client. And I think the numbers there are, quite frankly, are great proof points. One other proof point is -- that I think is an interesting one is we won a great deal last quarter with an OCIO, which is an outsourced investment management firm. And they had a lot of their own internal systems and realized that that's not what they're best at, they're best at advising their clients. And so they put us through our paces along with some other providers. And not only were they impressed and chose us, but they actually want to use a referral to their clients. So they want to go to market with us in a way, and I can't think of a better testimonial than someone who not only buys our solution, but wants to go ahead and talk to their clients about our solution. So if we put this all together, that we've got the personalized content to record at the workflows, whether it's front, middle or back, dedicated to certain types of firm types depending on their needs, and we've got the packages and solutions that fit that where we're going to market in that client segmentation depending on the sophistication needed and capturing that price, I think it will just lead to that retention that's so key, that's really been driving over the last 18 months despite a pandemic as well as our customer success and new logos. Now what you saw before was the fact that we're at $1.750 billion. Now that I'm no longer in finance, I don't have to be so precise, so I'm going to round that up to $1.8 billion, but that is at a 9.4% growth rate. That's 500 basis points higher than when we started our -- this pandemic. So I'm incredibly proud of the team. I'm really thankful to be with all of you. I think we have great confidence in our ability to maintain an 8% to 9% CAGR going forward. And I'm going to turn this over to Linda, who is going to talk about how this all fits from a financial perspective. Thanks very much.

Good morning, everyone, and great to see so many familiar faces again that I've been seeing for many, many years. So thank you very much for coming today. As I was watching Helen do her presentation, I noticed that FactSet stock had kind of moved into the green, which is great, which could be because we're doing a great job. Or it could be because Tiger Woods just announced he is playing in the masters. So not really sure what is causing that, but it's a good sign. Yesterday, I celebrated my 6-month anniversary at FactSet. As some of you know, I've worked some other places doing some similar things. And I thought about what we've accomplished in 6 months here. And when I interviewed, Phil said we really need to pick up the pace. We really need to pick up the pace. So it's like, okay, that's good. All CEOs say that. But in 6 months, we've joined the S&P 500. We've done the largest acquisition we've ever done for $2 billion. We got ratings. And not only did we get ratings, but we got investment-grade ratings. And for someone who used to work at a rating agency, that means a ton. And we also issued debt, and we cleverly issued debt in a very timely way when it was really good market conditions to issue debt. So this is to say we have really accelerated our pace. It's been a blistering pace for 6 months, but we're very, very proud, and this is setting the standard for the new FactSet in which we are accelerating. So to explain that a little bit more financially, those of you who know me know I always talk to the slides and I don't have any notes, which is either really good or really risky, but we'll see how it goes. We want to talk about 4 different things which are really important to FactSet's business model. And this is a great, and frankly, underappreciated business model. So very robust 95%-plus subscription-based revenues. We know where the revenue line is going. That's very, very important. Strong EBITDA flow-through and very good free cash flow conversion. So if you're Warren Buffett and you want to invest in a company with all those Buffett-like things, this is a very good one to choose. Our strategic investments have gone really, really well. This company took a very, very bold step in 2019 and decided to really move to invest and to take the margin down, frankly, but to be different and to move in a way that was contrary to what everyone else was doing, and that has really paid off. And we'll talk a little bit about that. Not only is it paid off. It's paid off big in the pandemic, which has been some of the toughest business conditions ever, so we're very proud of that. As many of you know, my favorite topic is disciplined capital allocation, so we're going to talk a little bit about that. The investment grade balance sheet gives us flexibility, I think gives us heft and really allows us to do some things we couldn't do before. So that's great. And then we'll talk about our earnings growth and what we're looking to do on our 3-year goals. So looking historically, again, I don't think this is always appreciated. We have been kind of chugging along at a 6.8% revenue growth rate. For this year, we're at 9.7%. And how did that happen? Helen talked about really 3 things: 50% probably coming from better retention. If you keep your clients, there's less pressure to get new ones. We still love new ones, but having higher retention with existing ones is important, maybe 25% from price and 25% from new logos. Price realization, very important for FactSet. You can have a price deck, which increases gradually based on value at 3% or 4% or 5%. But if you negotiate away those price increases, if you don't realize them, you don't get anywhere. This is about discipline pricing as well as higher retention. So very, very important. And I would comment to all of you, if your firm decides to hire a new head of sales, hire the former CFO. That's a really good idea. So I'm a huge Helen fan in that regard -- in every regard. Adjusted EBITDA, we're doing very well there as well, 7.8% over the past 5 years. The margin, we're going to talk about that in a minute, up to 8.4% for this year, so also going really, really well. CapEx as a percent of revenue, 2.4%. Back in FY '20, we decided to build out a very nice Manila office just in time for the pandemic, oops. Anyway, CapEx should be more typically down around this level. And then free cash flow, my very, very favorite thing, 14.9% growth. This year, it's negative, that's because we just bought CUSIP, but that will be changing here pretty soon. So a very nice set of numbers. Most importantly, most recently, these numbers are all looking like they're in a really good place. Now, we decided to do these investments 2019. Big decision, $100 million of investment in the last few years. What do we do with it? Roughly 50% in the digital platform, 25% in deep sector, a little less than 25% in private markets. Now, the business is changing. This is not the business of making soda and chips, which was another business I was in, in the '90s. You have to actually build things and change things in these kinds of companies. So you see what's happened, the acceleration in the growth rates from the investments, this is a great demonstration that we really got it right in terms of where we decided to spend the money. So these 3 big buckets are very important. And this year in May, we're going to look at these big investments and then look at other potential new ideas, and we're going to figure out what we do with the next batch of investments, continuing to work on some of these that are really going well for us. Now, returning capital to shareholders. This is a bigger version of how much free cash flow we have because it's such a great metric. I made a bigger version of this slide. So what do we do with all that free cash flow? Dividends growing at 9.7%, $0.5 billion over the last 5 years. Share repurchases, we've done $1.25 billion over the last 5 years. So $1.75 billion of capital returned to shareholders, really good thing to do. Our payout ratio and the dividends compared to net income, about 30%, the cash flow payout ratio about 26%. So we've done a pretty good job of balancing between these 2 methods of share repurchase. Now what are we going to do in the future? In the future, we'll probably do this in about a 50-50 way, returning 50% of our capital to shareholders and reinvesting about 50% of our capital. So when you look at this, we have some things here that may help you with your modeling. In investments, we're looking at annual organic investment net of 100 to 150 basis points of revenue. So sort of $18 million, $22 million going into the next year. CapEx at about 2.5% to 3% of revenues. Now, this net investment is important. I'm going to ask the business units for some productivity improvements coming back so that we can shift our focus to some of these newer investment areas. So we're going to make sure that we're optimizing, Kristy is my partner in that. We're going to have to look very hard at all the different ideas that are coming our way. And we're going to have to practice our Nancy Reagan, we're going to just have to practice just say no, because we can't invest in everything. We have to focus, and that's really important. Now, share repurchase. We're on a journey with our new CUSIP business. We've made a strong commitment that we will normalize our balance sheet to get back to normal investment-grade levels, I'll talk about that in a minute. So we're looking to think about resuming our share repurchases as we get to late fiscal '23, talk about that in a minute. Dividends, you see the quarterly dividend 25% to 30% of net income. And our acquisitions right now as we work through CUSIP and paying down our debt, we'll probably do some very small tuck-ins or primarily partnerships for the next year or so because we've just had a very big meal in terms of CUSIP, and we have to digest a bit and make sure we get it right. So that's what we're working on. Now what dido we do when we did CUSIP? Once again, we started out with our -- this is gross leverage, so not taking cash we have into account. We started at about 1x. You could have said the balance sheet was perhaps a bit flabby and underutilized and kind of hanging out, we needed to really get it to work. So we put some debt on for the acquisition of CUSIP. Right now, we're at 3.9x, which is a lot, but our commitment is we're coming back down to 2x to 2.5x. This is the goal. This is where we're going to stay. This is where we're going to be. We like very much being a Baa3 company, and I can't use the Fitch or S&P nomenclature, I just can't bring myself to do it. So Baa3, it is, right, Ignacio? Right. So we also updated our credit agreements. We put in place our senior notes, which we priced on February 15th. 6x oversubscribed for a first-time bond deal, 6x. That's big. And we really got it just right, which was amazing work by the treasury team. So we have a $1 billion prepayable 3-year term loan. We have hedged 80% of our exposure, and we did that back as we priced the notes around February 15. So we're locked in even as rates go up, so we [ thought ] about that, which is really good. So if you're modeling, interest expense will start at $50 million. It will ramp down to $40 million as we repay the term loan, and the floating rate exposure is protected with some hedges. So all that's very helpful. Now we gave improved guidance when we last did earnings on March 24th. Everybody was kind of not too excited about that, so I'm going to give this another try to see if you guys will like this. This revenue midpoint here has gone up about 8%. Our adjusted operating margin went up 50 basis points. Now, could we do better? We hope we can do better. But we have a situation which is pretty difficult geopolitically, and we have a Fed that may raise 50 basis points at a time. This is a pretty dicey global situation, and we were reporting first. So we did not want to get out of our skis. We feel comfortable with this, so we'll see how we do. And if we do better, that would be great. So we'll see what happens. Tax rate, a little bit lower because we're taking some charges you've seen for real estate rationalization, talk about that in a minute. Our adjusted diluted EPS, that midpoint has gone up 9%. So we are optimistic about the rest of this year, and we will now take a look at CUSIP joining us. Okay. So CUSIP business, absolutely incredible business. It is the social security numbers of investment securities. That's basically what it is. 9-digit number, it has a system. Jonathan knows all the codes for CUSIP because his first job when he worked in Canada was developing Canadian CUSIPs. Not a very well-known fact, but that's what he did. So anyway, pre-acquisition, when we bought CUSIP and we had to do this very quickly into a hotly contested auction. We paid about 17x, 18x EBITDA for this business with a $200 million tax shield, so the price was good. So you look at this post-acquisition, what's going on with the numbers. Annual subscription rate of $165 million. Revenues of $185 million, and that comes from 2 different functions. There's a subscription capability by which you're able to access anything you want to know about CUSIP. And 15% of the business is a new -- if you want to get a new CUSIP. So this one varies. For example, if IPOs go down, this number is going to be a little bit lower. But all told, the business is very, very sticky. So we found ourselves now with an interesting situation. We said mid to high single digits, it will be about the same as FactSet. But right now, the core business is actually doing a little bit better than how CUSIP is doing. So we'll be okay with that because the margins on this business, adjusted operating margin, about 55%, and that helps us. It gives us a lot of flexibility, and it's just a terrific business model. So we feel very fortunate having CUSIP in our house, as JR said. So now, we're going to talk about the margin expansion plan, what you've all been waiting for. Alex, I hope you're happy. In a minute, we'll find out if Alex is happy. So what we need to do here are a couple of different things. Our people expenses, keep in mind, ASV growth, 8% to 9%. People expenses, 7% to 8% growth. Alex is thinking, Linda, that's a very high number. Why are you doing that? Well, the reason why we're doing it is because we have to invest in people who can build these great products. And what we want to do is make sure that we can hire the right people to support the new growth opportunities. For those of you who know Python engineering and who may be artificial intelligence experts, you're probably not in this room because you're making more money doing something else. So we have to pay all that for all of that, but we have 66% of our people in centers of excellence so we've got our cost balance right. And we are looking to substitute, in some cases, people who are doing things like content collection with technology. You heard my colleagues talk about that. So we can upskill these employees, have them do other things for FactSet, but we have to go through this transition. So real estate, we took a look at this. We have our new way we work. People want to work hybrid. We have too much real estate, so we took it down. And we said a $45 million charge will be coming in the third quarter to reduce our footprint in our space. That will give us approximately $10 million to $14 million of further investment in the next 3 to 5 years. So that's a very helpful thing. We're taking that expense down 150 basis points as a percentage of revenue, so it comes down from 5% to about 3.5%. So this provides funding for this and for this. Now, Gene's services do not come cheaply, unfortunately, so we have to support what he's doing. We put things in the cloud, and lo and behold, everybody was really excited and our clients wanted to move to our cloud. So we're like, wow, look at that, the cloud utilization is much higher than we had expected. Now, that's great. It's sticky, but it's an expense. So Gene was thrilled and I'm kind of like ermm. So anyway, we have to think about this, but this has gone quite well, and it's actually a very good thing. The other thing we're doing is we're building our own software and that causes, obviously, increasing capitalization, which later causes an increase in amortization. And if you don't follow all of that, maybe you can ask like Mana. Mana is pretty good with accounting, so he'll help you explain how all that goes. So this is actually going up 8.5% to 9%, but we hope that we have some substitution here to allow our employees to be more efficient. And third-party data costs, here, we've got 5% to 6%. It also is lower than ASV. What's the reason for that? We're buying more data from others, we're having more usage, and so we hope to keep this number even a little bit lower than this, but we'll see what we're able to do. We have a very good team who works on procuring third-party data for us. So we have kind of a mixed thing here, but we have sources of investment and then places where we're going to have to spend a little bit, and then our third-party data costs, hopefully not going up too fast. So this is where we have come out after thinking about it long and hard. 89% ASV growth. As Phil had said, $500 million of ASD in the next 3 years to get this done. It is not an insignificant achievement. 50 to 75 basis points of margin expansion per year, per year, and that's going to deliver 35% to 36% adjusted operating margin at the end of 2025. Could we possibly do better than that? We could possibly do better than that. We'll see how I do getting productivity commitments from my colleagues, but they know that's going to be coming. So this is going to be quite an interesting model. You see Research and Advisory growing at high single digits. Analytics and Trading at high single digits, and CTS with the benefit of CUSIP as well, growing in the low teens. So you put all that together, you get 8% to 9%. I think that's a pretty healthy number. And yes, yes, we are confident that we can do that. And then our adjusted operating margin, 35% to 36%. That does include CUSIP as well. And then our adjusted diluted EPS growth, 11% to 13%. As we said, we hope to get back to share repurchase at the back half of next year. So we think this is a pretty good model. We're pretty pleased with it, and we think we can really make it work because it has been working. So very strong basic financials. The investments that we've done have paid off. We owe you a better explanation of what we're investing in and what's coming out the other end. We're working on that. That's something that the company has to develop. Capital allocation. We think we've got it right. We've got our investment-grade rating. Should anything happen, we're ready. We're able to issue debt very quickly. We have a shelf registration, and our earnings growth driven by ASV growth and those investments and everything you've heard about today, we feel really good about where we are, and we think that we're going to be able to achieve what you saw back here as we move through time to 2025. So with that, I think I'm done. I think Phil is coming back. I think Helen is coming back, and you're going to fire questions at us. So let's do that. Thank you.

So we'll start. I'm going to start with Manav.

Just on the top line growth, and Phil and Helen, all of you, you sound very confident on the 8% to 9%. It sounds like the mean difference versus prior years has been the price rationalization. But I was just hoping if you guys have had it a few different ways and think about how you break that down by pricing, volume penetration, et cetera? Or even if you look at it sell side, buy side or whatever way you cut it?

Do you want to start, Helen?

Sure. Happy to. So I want to start off with the fact that all the investments that we've made in the enhancements has created that greater value. And so while we have been able to get greater price realization as well as price increases, it's really around the strength of the product itself. We couldn't do it without it. I would say that if I break that down as what was detailed by Linda, about 1/3 of it is new and the rest is existing clients. And that's what's really driving the growth, better retention as well as more growth with each client, more greater wallet share across the board.

So I'll add on there, Manav. So we've got great momentum right now. A lot of that increase in growth is being driven by deep sector and the opening of the platform. But some of the other big investments we've made around private markets, ESG, real-time. Even our front office solutions, we're yet to really capitalize on those investments, so we're excited about those coming to market and helping to drive big time.

And probably the last thing is the countercyclical nature of the investment that we made. We've invested $100 million in a period of time when some of the competitors have been busy merging, changing hands, focusing on cost cutting, and I've been very clear about that. And potentially I have been shifting investments from the analytics part of the business to other parts of the business, while we have really put money into our products. So now when you do a head-to-head comparison, you're doing trials, our product just shows really, really well. So that's helped also.

Wonderful. Kevin.

Thanks, and thanks for doing this. Very, very helpful. Just one quick one, Linda. The 11% to 13% EPS growth, does that assume any incremental buyback at the end of '23? Or would that incremental to the guidance?

It assumes that we will resume buybacks but at a slow pace, because we got to repay our debt first, and then we'll pick up as we go into 2024.

Great. That's super helpful. And then Phil, what's kind of been interesting is you really reset a lot in terms of products, things like that. You talked about 3 or 4 companies can do what you do. Maybe talk to the competitive environment a little bit, and then the clients you're serving, because I think you open yourself up to a much broader client set. Maybe talk about those dynamics a little bit, just given how much the tech stacks really reset?

Yes, I'd say, versus the larger competitors, Kevin, we're really agile there. We're getting into areas of the business they've been in and we've not been before, so we see a lot of greenfield opportunity there. And some of these new markets or client types like corporates, private equity, wealth, it's a little bit more mature. We just view that as an opportunity to go in and just grab market share essentially, so we're not having to defend there. So I think clients are recognizing the investment we've made, not just in opening the platform but the interface itself. The FactSet workstation, we're well above 150,000 users now, but there's 1 million screens out there. And we feel like the new look and feel effects or the cognitive capabilities that are coming in are going to be really market-leading and give us an opportunity to not just sell enterprise solutions and open solutions, but really just capture more seats.

I could make this easy for you, Ashish.

Linda, again, thanks for the details on the margin. So maybe I'll ask the question that Alex might have asked, but.

Alex looks worried.

So maybe -- you talked about coming up with more details on the productivity side, but I was just wondering on the people cost. As you think about off-shoring versus on-site or automation, how should we think about more opportunities on the productivity front there? But also on the technology front, as you move to the cloud and maybe retire some of your data centers, how should we think about the cost savings on those fronts as well? So more details on the productivity side.

Sure. I think, Ashish, we're going to have more details later in the year as we go through our 2023 planning process. We may not end up with all the benefits that Gene had described previously because nowadays, it's smarter to keep some on-prem capability for security reasons. We live in a more dangerous world. So to be able to run some things on-prem, have gold copy of data that we own and we have is important, but we will see. We feel we're -- by the end of this year, we'll be more than 80% through our journey. So that's pretty good. And with the people costs, I think, again, it's a trade-off. We're pretty happy with the balance of what we have in terms of our centers of excellence, so it's hard to push that a lot more than we have. So we're pretty good with where we are but this is a bigger issue, and we promise it will make for exciting earnings calls as we finish out the year.

So I'm going to take one question online, and then Alex is here, then he can -- we have a queue. From Andrew from William Blair. Which clients would you expect the ASV mix to evolve the most with over time?

Sure. Let me try to talk to that. So when we talk about where we are those firm types of what's established, where we've got a pretty good leadership position in, think about that as being in the high single-digit growth across the board. And then those firm types that are growth, those are in the double-digit land. So we don't give out our information by firm type, but you can think about it in that fashion. Currently, roughly the established firm type's around 80% of the total and -- but because of the smaller and faster nature of the growth ones, I would sort of see 2025 as being more 30%. So instead of 80-20, it will be more like 70-30. So that's the way I would think about it of what's driving that underlying growth.

Wonderful. Alex?

All right. So maybe I'll just ask 2 follow-up questions since my topics have that. On the margin -- maybe on the margin first, and I'll go back to the slides and look at all the different pieces. But I think this came up on the earnings call, like CUSIP should have rebased you higher by a few hundred basis points. So is the new starting point or the new target range, is that basically, hey, you're spending some of that away? Or is it because some unforeseen things have come along like those higher technology costs, et cetera? So maybe that's then -- well, maybe I'll wait with the second one. So maybe start there.

Oftentimes, we get like 5 questions at once, we can't remember them -- I've counseled Alex about this.

I'm good, that's okay.

Yes. So the answer to the question, starting at 33.7% adjusted operating margin at the end of the second quarter. Kendra says yes, I got it right. Good. So yes, we get about 100 basis points plus from CUSIP, that's true. We started out the year very slowly with hiring and with some of our project spend because with this whole great resignation thing, the pace of rehiring was frankly slower than we thought. It's going to pick up in the back half of the year, so we may see the spend slightly higher in the back half of the year. We're not absolutely sure about that, so we're being thoughtful about where we go with that margin. So with luck, maybe we'll do better. It depends on the pace of hiring. It depends on a couple of other things. It depends on the tax rate, how many options are exercised. There are a lot of things that go into that. So yes, basically a little bit higher spending in the back half of the year than the front half of the year, and that's consuming a little bit of that CUSIP margin, but we think that will normalize over time. So 50 basis points from the core business and then put on another 25 over time from CUSIP. So that's how we're going to think about it. Follow-up.

And that's consistent with the -- not just for this year, but going forward, same, same to the -- And then since you just mentioned the tax rates, to come back to Kevin's question on the 11% to 13%, I mean, my assumption is the tax rate should rebase higher a little bit, but -- and you have to overcome that, but maybe you can flush it out a little bit. So we don't get carried away.

Sure. Yes. Don't get carried away. Very difficult for us to guide on the tax rate, so we're choosing not to do it beyond the end of 2023 because elections are coming, tax rates are moving all over the world. Great Britain, for example, is taking up its tax rate. So for the end of this year, because of some of the charges that we talked about, real estate, a few other things that you see coming, the tax rate will be lower in the back half of this year. It's coming down 200 basis points for our effective tax rate, so that will help us on the EPS line as we move through toward the end of the year. But we don't want to guide the tax line too much further out than that. It's a pretty tricky thing to do with governments changing around the world, so...

But no matter what, the 11% to 13%, you feel good about, no matter what the tax rate is going to do?

11% to 13% for the rest of this year.

No, 11% to 13% growth over the next few years.

EPS growth. Yes. Yes.

Toni?

Toni Kaplan from Morgan Stanley. Linda, you just alluded to it, but the sort of tough hiring environment. So what are some of the things that you're doing on the recruiting side? Understand comp expense might go up, but other than that, are there certain areas that within the sales force are tougher to hire in? And could that actually impact growth just depending on mix of where you're able to hire?

Yes. So I think like a lot of companies, right, we're seeing elevated attrition. It's ticking a little bit above what it was for us pre-pandemic, but Dan and team are doing an amazing job of really thinking about our employees, understanding who are the critical employees, which areas are most under duress. And we've done a lot there, frankly, in Q2 to help address that with compensation and some additional equity for employees. So we're thinking about that carefully. But the How We Work program, that is very highly valued by our employees. I traveled to most of our U.S. offices in the last few weeks and heard directly from engineers, from salespeople, and the flexibility that we're giving folks is appreciated highly, and then there's a lot of other things that we're doing as part of that program. So FactSet has always been a great place to work. A lot of us have stayed here because of the culture and we love the product and working with the clients, and I think you can really hopefully feel that today. We've got a great team and we're having fun together. It is hard work, but we're very optimistic about the talent we can attract and keep at the company.

That's great, and just as a follow-up. Linda, you did make the comment that now you can do things with the investment-grade balance sheet that maybe you couldn't before. So maybe just give us a little preview of what those could be?

Sure. I think I've deferred to the CEO on that. But we have done the biggest acquisition we've ever done. $2 billion is -- $1.925 billion, to be specific, billion is big for us. So job one from our Board of Directors is to get that integrated, and we're well on the way, as JR had spoken about. Then from there, maybe once we're back down in that proper investment grade leverage level of 2.5% down to 2%, then we think about potentially something else. But we feel this is a really great and strong base for the company from which to operate.

Okay. We're going to take a moment so the microphone can get back on the side of the room, and I'm going to take a question from our online audience. Craig Huber, Huber Research asked, can you talk very briefly earlier on today about the size of the addressable market? How fast do you think your addressable market is growing today versus your 8% to 9% medium-term ASV growth target?

I mean, I'll take a swag at that, I guess. So I think within the wealth space, corporate space, private equity, amidst opening up billions of dollars in addressable market and in terms of our opening up the platform and the solutions that we're providing for the buy side, I would say, it's similar, so I would say that our addressable market is growing faster than our top line growth rate. So Helen, I don't know if you've got a different view?

No, totally great. I mean, back to the point around the greenfield firm types, we now have solutions that maybe we were as part of our addressable market, but now we'll be able to capture it. So that's the way I might look at it as well.

Wonderful. Next question.

It's Faiza Alwy from Deutsche Bank. Linda, just wanted to ask you about the geopolitical uncertainties that you've embedded in the model, it sounds like for this year. Perhaps we can back into it, but I was just wondering could ask you directly sort of how much have you thought about that? Is that quantifiable from your perspective?

It's pretty hard to quantify even if you were an army officer, like I was. But the thing that you know is this is not the time to get out over your skis. And the interplay of what the Fed is looking to do with the geopolitical situation, the discussion now that, in fact, recession may occur, is a pretty important consideration as well. So either of these things could tip one way or the other, and it's a very difficult time. We've been very public about our business in Russia, we have removed ourselves for the -- absolutely for everything that we're doing. But other than that, we have no control over any of this. So I think to be prudent is probably the best thing to do. Pretty hard to quantify, and your guess is going to be as good as ours. I think the nearer impact is what happens in Europe, and so far, everything we've heard has just been anecdotal and everything looks fine, but the longer this goes on, it could become more challenging.

The good thing to remember is we've been through a lot of different wild markets in the past. And FactSet has always performed very well when the Internet bubble burst and during the mortgage crisis. Because of our stickiness in our subscription business, we've continued to execute, and I think it might have been one bullet in the last 25 years in terms of negative growth on the sales side. But other than that, we're a safe harbor in difficult markets for sure.

And another quick follow-up would just be increases in interest rates drive up net interest income, NIM margin, for banks, so it may actually be helpful to of our clients. And we think for active managers, this might be a great time for active managers because the markets are more choppy. So we'll see what happens, but they've got some great tools to work with as they actively manage.

You have one follow-up, and then I'll go back.

Go ahead.

Just a quick follow-up. I guess, not really a follow-up, but also a margin question. How should we think about, like, the mix and the impact of that, whether it's product mix, client mix, on margins going forward? I know you guys haven't really talked about that too much, but I'm curious if you can conceptually talk about that on a longer-term basis?

I'm not sure it matters all that much. I think we've -- Helen has got the pricing working really well now in bundled packages, and I think the pricing is pretty consistent. So I wouldn't -- I wouldn't concern yourself too much with that. You can work on the geopolitical thing first.

Keith.

So just looking at the guidance for the '22 and then the medium-term guidance, I think we can all agree with some conservatism the first year's number, the rest of this year based on what's going on. But as you look at the medium-term guidance, how much are you conservative and is built into that in terms of potential recession? Perhaps touching on the downturn playbook, is there some -- is that our sacred cows and you wouldn't look to cut, but is there other areas that you might? So we -- give us a playbook on what happens if we do hit a recessionary environment.

Sure. So for downturn playbook, obviously, bonuses are going to reset down. That would impact us by tens of millions of dollars, and I would have to see how far down business goes to look at the impact there on compensation. Obviously, we would look at some of discretionary spend. We think hard about what we're doing, so we can find some tens of millions of dollars of savings without breaking anything here. And these companies tend to adjust pretty well when those conditions show themselves. So I think we would be fine. If we have a downturn that is short in duration, we can obviously manage through it. I mean, the company managed through it really well in 2020 as the pandemic hit. So I think we're sort of battle tested in that, which is fine. And I think your view that the margin situation is conservative. I think we feel we're -- we would prefer to be prudent. So I think we'll leave it at that.

Yes. We can easily adjust hiring because we're -- so people heavy in our business.

We have time for one more question. Go ahead.

I want to go back to capital return. Could you please talk about what does it take to drive higher than the 50%, 50% historical capital return percentage? And in terms of R&D, is any conversation to talk about how much R&D can drive, let's say, the retention rates so that you can lower the R&D and then give something back more to shareholders?

So 50% return of capital shareholders given the investment view that we have on our company, I'm not sure we want to go there. We're a growth company. If you want really big dividends, you can buy pharma companies or do something different, and this industry might not be the one to look for those highest dividend payout levels. If we found ourselves in a time when we were not happy with the share price, that might be a time where we would potentially think about more share repurchase if we repaid our debt, but I'm not sure that, that would necessarily happen. That's a very speculative view, and I haven't talked with Phil or the Board about it. But we like our 50% return of capital to shareholders. We feel pretty good about that. We think it's healthy, and the stock price has moved very nicely. So we think that's the most important way to reward shareholders.

Maybe I can just add just one point on your R&D. It's because of our investments that we've been able to improve retention and accelerate top line growth. So to me, that's a great use of capital. So I wouldn't necessarily look to that as something we would try to adjust because we want to grow, and growing is investing back into the company.

Wonderful. Thank you, everyone, for your questions. Thank you, panel, Linda, Phil and Helen, for joining us and walking us through that. Now, thank you.

So I just -- I'll keep this short and sweet. So a growth company. We've got great momentum. We've really reinvested in the next version of the FactSet platform. We've always been a platform company, so we have an engine of innovation that's going to continue to drive growth for us. We have a rapidly expanding opportunity in front of us as a company. We've got a great business model and a proven model, and we've got a great team and a great culture at FactSet. So all of those things to me add up to a winning formula. Thank you all for coming today. It's great to see so many people in person. Please stick around for lunch and some demos. And if any of you want to get a deeper dive into any of our products, all the things we talked about today, we love our product, and we love our company. So you're welcome to come to our offices, and we'll show you the best of what we have to offer. So thank you all very much.