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

Good morning, everybody. Thank you for being here on Day 2 of the conference. I think as I said many times yesterday, it's great to be back in person. For those of you who don't know, my name is Manav Patnaik. I'm Barclays' business and information services analyst. And we're extremely pleased to kick off Day 2 here with FactSet. And we have CFO, Linda Huber, here with us. And for those of you who don't know Kendra Brown up front, she's the Head of IR there. Some of you who have been to our conference before have probably met Linda as CFO at Moody's, maybe even CFO at MSCI. Those were virtual, I think, when she was there. But now we're extremely pleased to have her here as CFO of FactSet. So Linda, thank you for being here yet again.

Thank you. Great to be back.

So Linda, maybe just to start off with as a kind of a high-level overview for some of the people that are perhaps new to the story. Just roughly, how would you characterize what FactSet is and does? I mean, on a very loose level, we just think of it as a desktop, but it's much more than that. So maybe if you could just start us off with that.

Sure. FactSet is a data and analytics company, which sits on top of some of the largest and most important data sets in the industry and offers really cutting-edge products to allow investment professionals and other consumers of information to really make the best use of their time and their talents. So I've been very excited in coming to FactSet with all the opportunities that are in front of us. We've had a pretty active first 6 months, Manav, as you may have noticed. We acquired the CUSIP business. And we were also early on joined the S&P 500 late last year. We were able to get investment-grade ratings both from Moody's and Fitch. And then we issued debt, quite fortunately, on February 15, which was before rate hikes really occurred. So we're very pleased with all of that progress that we've been able to make so far. So it's been a busy 6 months, and FactSet has been doing quite well.

Got it. So we'll get back to some of the FactSet fundamentals. But let's talk about since you've joined the company. What have been some of the positives or negatives that can -- what has surprised you in terms of once you've been here now around 9 months or 6 to 9 months here?

Sure. Well, this market is certainly not a positive. So if you could fix that, Manav, given your long tenure, that would be really, really quite helpful to all of us. I think on the positive, the overwhelming positive is the culture of FactSet is just wonderful. The employees are open minded, willing to think about different ways of doing things, very talented and really pull together as a team, which is just great. And that's been just a pleasure to join the company. And I think it's been a pretty easy transition, which has been wonderful. Phil Snow has been with the company more than 20 years. As CEO, he's highly respected because he grew up in the company. So a great partnership, and I feel really lucky to be on the team. So we've been making great progress. And the other achievement of the first 6 months is we had our Investor Day on April 5, which I think was very well received. We were quite a bit clearer, we think, in terms of those intermediate term goals that we've put out there for the market. So I think there's a good understanding as to where we're trying to go. And I think we're communicating the story more effectively.

Got it. Great. And before we dig into some points, maybe if you could just help reiterate those medium-term goals just so people have that as a framework as we talk about a few other points.

Sure. And these are goals on average over the next 3 years, but most importantly, growth in annual subscription volume or ASP, 8% to 9%. We also talked about margin expansion on average of 50 to 75 basis points, such that the adjusted operating margin will be 35% to 36% as we move through the end of that period. And then growth in adjusted earnings per share of 11% to 13%. So I think that was -- that those goals were well received by the marketplace. And so we think that, again, the message was the right one, and we are quite committed to that. So I think it went over very well.

Got it. That's good to hear. So let's talk about capital allocation to start with. I mean, timing may be worked out well for you. But the minute you came in, FactSet hadn't done a deal like this for many, many years. They've been net cash forever, and then CUSIP. So maybe just walk us through the framework there, how quickly you have to get that done as soon as you joined here.

Sure. I joined FactSet on October 4. And as we get -- got toward Halloween time in the U.S., the end of October, it became clear that the CUSIP business was going to have to be sold by S&P as part of its merger integration of IHS Markit, a very attractive asset. And the auction process was competitive. We understood there may have been as many as 10 companies in the process. So we moved quite quickly, and great credit to Rachel Stern, our General Counsel. And we moved quite fast to get a contract that would be workable for both companies. And we went through 2 rounds of bidding. And we were told that bids had to be submitted prior to Christmas time, which is quite an accelerated timetable. What we found is that the CUSIP business had not been reported separately. It was a part of a much larger company. So we had to move quickly with information that wasn't all that fulsome. But we were able to do that. And we announced the deal on December 27, keeping everyone busy over the Christmas holiday period, not to let there be any rest for the weary. And then on January 5, we talked about our financing plans for the transaction. So it was sort of an 8-week sprint. And we're very, very pleased with what we've been able to do. We think it was an excellent use of proceeds for the company. We got our ratings. We're able to put a bit of leverage on FactSet. Right now, the gross operating leverage is 3.9%. We'll bring that down to 2.5% to 2% at the conclusion of about a year. And then from there, we have a few more options as to what we can do. But it's all worked out quite well. The CUSIP integration has gone really nicely. The employees seem quite happy to have joined us. And I think the really interesting fact is that Jonathan Reeve, who runs our CTS business, had run the CUSIP business while he was at S&P. So the team knows him. He knows the team. And I think that has made the integration go more easily.

Got it. And CUSIP is about 10% of your mix now, and very steady business, great margins. But I think, again, just for the benefit of the audience, I think people know CUSIP as a securities identifier. But maybe just give us some of the business characteristics, on growth and margin profile and so forth to appreciate the deal.

Sure. The growth characteristics, perhaps a little bit slower right now than what we're doing for FactSet, which is fine. But the margin profile is quite attractive. We had talked about that as being 55%-plus adjusted operating margin, which is very helpful to FactSet. The great thing about FactSet is -- about CUSIP within FactSet is the recurring revenue nature of CUSIP. So about 85% recurring revenue to be able to access that CUSIP database and 15% is the revenue that comes from the origination of the new CUSIP identifiers. So if the capital markets are running stronger, that's better for CUSIP. But still, 85% of the revenue base is subscription-oriented and recurring. So the growth opportunities for us with the CUSIP business would be with new asset classes. One which had been helpful to us over the previous few years would be the formation of SPACs. Maybe perhaps that might be more in the rearview mirror now. So we're looking at other asset classes as we move forward, perhaps looking to identify oil and gas assets or pools of securitized, if you want to think in the future, carbon offsets, things like that. That might be newer areas where we could attach CUSIP identifiers to various asset classes.

Got it. So is these new asset classes where the primary revenue synergies would be? Because I mean, margins are obviously pretty attractive.

Yes. The margins are, you're right, quite attractive. And yes, the growth would be in new asset classes. But we found that bankers as a group tend to be pretty creative. So we're quite sure that, that progress will continue.

That's good to hear. So just talking about margins again. I think one of the main areas of debate over the years with FactSet had been kind of the inconsistency around the margin. And with what you said on your medium-term guidance and what you've done so far, sounds like that's going to change. So maybe if you can give us a -- when you came in, what did you see as -- what did you change, I guess, relative to -- or what do you plan on changing, I should say, relative to what you saw there?

Sure. It's easier to find opportunity. But then, of course, we have to convince the organization that that's the right path. And I think we've been able to do that. For example, FactSet offers a very flexible work environment. So we found that 70% of our employees prefer to work in a hybrid manner. So we found that if we looked at the amount of real estate that we leased, and we have all leased real estate non-owned, that potentially we didn't need every square foot of real estate that we have given that employees want to work sometimes from home and sometimes in the office. So we've explained all of that, and I think it's very well understood. We've talked about how in the third quarter we're going to take a charge of approximately $45 million for some of that real estate being shut in, if you will, to use an oil and gas term. So what we'll do with that money is, over time, we'll redeploy those funds into reinvestment in the corporation, perhaps some of it to the margin to the shareholders. And we're looking at $10 million to $14 million of investment coming out of that decision to redeploy some of our resources from real estate leases back into investment in the company. And the employees understand the importance of that. And I think for the shareholders, it shows good management of our resources to where they need to go. So that sort of thing is a good transition, and we'll be thinking more about those kinds of things as we go forward. But I think primarily, just good discipline in running the business and making sure we're making the best use of the resources of the company.

Got it. Outside of real estate, you had identified 2 or 3 other focus areas for you around your costs. So maybe if you can just talk about those as well.

Yes. Sure. We had talked about the people bucket. We had talked about third-party data costs, which is important for FactSet, real estate, which we had just spoken about, and then technology costs. So 2 of the ones that might be increasing a bit would be those people costs. And I think we said in Investor Day, those might look to be 7% to 8% of revenues and a bit of a growth rate there. Obviously, we've gone through a period of the great resignation. We'll see if that continues given what's been happening in the markets recently. But we have to be very thoughtful. The core of FactSet is its people and making sure that we have that right is important. I think it would be fair to note that costs for technologists have moved up for every industry, whether it's banking or what we do or for technology companies themselves. So we have to think about that. Real estate, as we explained, is a net generator of funds for the rest of the company. And we see real estate going from 5% of revenue down to 3% over that period of time. For technology, we're going to be substituting some people and moving them into different areas and further automating our technology collection. That's a journey that we're on under John Costigan who runs content collection for FactSet. And so we'll see that, that might tick up a little bit. The other thing that we found as we've moved to the cloud is our customers very much like to use the FactSet Cloud. And so we've been surprised by the take-up -- surprised happily by the take-up in the cloud -- of our cloud by those customers. It's a very sticky arrangement. We're very pleased about that. It's been adopted more quickly than we thought. So our cloud costs have gone up a bit faster than we thought, but that's a good thing. And then third-party data cost would be the last bucket, and we see that moving at sort of 5% to 6%. We have to be very cautious there and thoughtful. Our top 20 vendors there are probably 80% of the data that we need. And so we're very thoughtful in our negotiations with those other parties. Oftentimes, they're negotiating with us as well. So it's an interesting ecosystem. But there, again, careful control of those costs and being very thoughtful about what we lease in terms of data and what we own in terms of data. So good analysis going on there.

Got it. And so when you look at your 35% to 36% margin target, you're adding CUSIP at 55%. You've got a lot of these cost controls. How much of that target realization is dependent on the 8% to 9% revenue growth?

Some, but we feel very comfortable about that 8% to 9% ASV growth. It's actually what we're shooting for. And Helen Shan, my predecessor as CFO, is our Chief Revenue Officer. She's done a great job. We've talked a little bit about -- it's really the retention rates being very strong at FactSet that has been very helpful on that ASV growth line. So Goran Skoko talked about at Investor Day that this year, for example, 16 out of 16 of the customers in the research area decided to re-up with FactSet. So holding those retention rates at very high levels is very important to us. Another 25% of the top line growth comes from a focus on price and the other 25% from new logos. And we're having really good success with a lot of smaller companies adopting FactSet, which is great. Great to have those big marquee names. That's fantastic. But you also need some of the singles and doubles there. And our focus on price realization has been important. We've really done, I think, a great job of ensuring that we're not trying to be all things to all people. We have what's called a deal desk, which has been very good about standardizing the packages and the pricing for FactSet products, easier for customers to understand, easier for the sales force to sell. And we're trying to get greater uniformity in terms and conditions for the products that we offer. So all of that's gone really well. And we've looked at pricing for the U.S. in the first half of the year, internationally for the second half of the year. And we're being very thoughtful about what we see given the inflationary environment we're in right now.

Got it. Just to hone in on pricing a bit more. For the longest time, FactSet had a 5% handle on the ASV, and that was impressive given the environment. But 8% to 9%, it seems like the biggest delta is this pricing that you talked about. So how much of it is the -- I think you said 3% to 4% on the pricing side. How much is it because of the inflationary environment? How much is it because of product enhancements? And how sustainable should we look at the 3% to 4% to be?

Sure. I think 3% to 4% is quite sustainable. That would be pretty typical in this industry. Our longer-term contracts, again, provide for price increases from 3% up to CPI. That would be quite impressive given recent CPI numbers. We'll see what the print is later on this morning at 8:30 in the U.S. when that's released. I think we have to find the right balance there. But the biggest driver there is just the quality of our products and what we're able to offer our customers in terms of what they're actually buying in the broad range of attributes of those products. So if you have a best-in-class product, you can be thoughtful about your pricing. I don't think FactSet will ever be the most aggressive price leader. But I think we're providing great value for our customers. And to be able to realize that 3% to 4% is something on which we've been able to improve. But we've made -- you've seen considerable investment of $100 million from 2019. And we've been able to steadily invest as other competitors might have been a bit busy changing their corporate structures or targeting their investments more toward other areas. So our core research and data and analytics products have had 3 years of consistent investment and have been able to move forward while others may have been focused on some other things. So you get to the end of that period. And when we do head-to-head trials, we find that we're winning for the most part. And that's an exciting development and one that we want to keep building on.

Got it. Just to touch on your 3 big areas of ASV that you called out. Sort of research to start off with, which we think of mostly as the desktop side of the business. So in the last year or so, that really accelerated. It had shown little to no growth before and then suddenly jumped up. A lot of it might have had to do with the SPACs that you talked about and all the sell-side bankers hiring more people. But just talk to us about like how much of -- is that new level sustainable? Are there other offsets to it? Just on the sell-side piece, maybe to start with.

I think Goran spoke about this at Investor Day, and he thinks it is sustainable, which is terrific. Prior to him, Kristy Karnovsky, who's now Head of Product, had run that business. And I think it's a number of things. The desktop is now a thing which is often sold to our customers virtually. So I think that's a huge change. And those products are delivered electronically and are very easy to integrate into different workflows. The breadth of what is offered in that has really changed. For example, now we have an excellent suite of private market information. Probably most important and most exciting is our entry into what we call deep sector, which is, if you think about some of the products that have previously been offered that have very deep financial information, we've built out something very similar to that, which has now come to the market. It's a very fulsome and important set of financial data, which we developed for a beta client. We didn't just build it on our own. We had a lot of help and guidance from customers. So now we're looking to expand that deep sector effort into other verticals, energy, real estate, and then we will get eventually into health care. So these are very deep and rich data sets. And that investment in content has driven a lot of that growth in the desktop, as you would loosely call it. So we think that, that growth is there to stay. That's a big turnaround in that business and very important. So the longer-term goal for growth in that business is high single digits, which matches the ASV growth. So it's an important contributor.

Got it. And I think you alluded to competition before. But just in this market, in the research side where obviously we are more familiar with the company, has anything changed? One of your big competitors got acquired by the exchange base here. Have you seen any changes there?

I think it's just a degree of focus and how important are the businesses with which we compete within those much larger companies. We have, I think, the luxury of being able to obsessively focus on what we do for our clients. And we're sort of Switzerland, if you will, in this area. We don't have an index business. We're not running money ourselves. Data and analytics and support for our clients is what we do, first and foremost, in a very focused manner. FactSet has been public now for more than 20 years. Company has been around for 40 years. So we're quite well known. And we feel we can compete with some of those larger companies quite well, who may have different delivery mechanisms such as terminals and things like that. We have an open system and we're not locked into one delivery mechanism. So the goal of FactSet is to make our tools really easy for customers to use. They don't have to switch screens. They can pull information from various places and put it into their workflows without switching in and out of different products. And we found particularly amongst junior bankers and so on, it's a very attractive product.

Got it. Maybe let's switch gears to analytics, which is your next biggest segment, about 1/3 of your ASV. Again, what's in analytics firstly? And then maybe how should we think about that growth algorithm?

Sure. So one of the most attractive products in analytics would be the -- what we call the portfolio lifecycle. So what we're looking to do is to help wealth advisers and portfolio managers there do the best analytics on the portfolios that they manage and come up with that next best action, which is a pretty exciting thing if you're running a large number of portfolios and you have market events like we've had over the last few days. These analytics can look at what you have and literally recommend to you what would be the next best thing that you could advise for your clients given the databases that we have in comparing those portfolios. So it would be, how would you recommend to your clients to look at asset allocation or to think about tweaking or tilting a little bit given market changes. So that's a very interesting thing. For people who might be doing broader mass affluent kind of product focus, we're looking at how can you hyperpersonalize those mass affluent offerings. So that, for example, if you're more interested in ESG, how can you appeal to an ESG-focused investor, even though you might be looking at it on a mass affluent basis. So what would be the most important thing to that investor? So all of that is going on. And we think that we can help companies distinguish really well and make their products more sticky than perhaps their competitors. So those are the kinds of things that we're looking at. And then easing the reporting burden on asset managers who should be looking to provide alpha to their clients. Accurate reporting is probably something that they can allow others to focus on for them. So we provide those services as well. So that whole portfolio lifecycle is very important to us. And frankly, we're investing there more in the front office, the front end to make sure that our products are really easy to use for our portfolio managers.

And so should that segment grow in line with the 8% to 9% as well?

Yes, yes. High single digits.

Okay. And actually, before we go to CTS, just going back to research, I think wealth is now included in research and I want to touch on that. So I think the traditional desktop, we all have an impression, is saturated, but wealth is a very big growth area for you. Maybe if you could give us some perspective on your current positioning, market share and the opportunity there.

Sure. Wealth is an incredibly fragmented area. And a lot of customers are chasing the wealth segment. There are huge dollars there. Also, we're about to see a generational transfer of wealth from the boomers to other generations. So you're going to see a lot of transitioning of assets. So that's a very important thing that's happening in the marketplace now. So we think we have products for everyone, from those who focus on the mass affluent to those who focus on the ultra-high net worth. And with the reporting tools and the integration that we have in that whole portfolio lifecycle process, we think we're a very attractive competitor to provide information in that space. So yes, that is focused on the research area. But the products kind of move across all of the segments of the workflows that we offer.

Got it. So maybe let's just end on the top line side at least with CTS. Again, similar to what we did with analytics, what is CTS? What's in CTS?

Sure. CTS is how we transmit data and information to clients, mainly through the cloud, without using what you would think of traditionally as the desktop. So it's the fastest-growing part of the business, growing in the low teens. We're distributing information and data through APIs. So a very, very exciting part of the business. That's where our ESG part of the business is housed. We acquired Truvalue Labs a little over a year ago, and that business is growing quickly. It's, in fact, doubled from the time that we've bought it. And we're thinking quite a bit about some of these newer technologies and how do you transmit information more effectively to clients without the concept of the desktop. So all of that has been moving very well. Concept of widgets, what is the product that investors or that customers really want to use and how do we most effectively get that to them. So that's really the fastest-growing and the newest part of the business. And we're quite excited about it. Very good explanation of everything going on there if you go back and look at the Investor Day presentation.

Got it. And since you mentioned cloud, can you just talk about cloud at FactSet? We had a call about a year ago, I think, with your CTO back then. But just what's the update in the kind of cloud transition, tech transformation side of things?

Sure. We're coming through a 3-ish year journey. And the transformation to cloud has gone very well. That is a costly transformation to make because you're moving your technology from on-premises where it can be more capitalized in nature to something which is more operating expense-driven. So you have to get that balance right. I think, as I said, we had a faster take-up from customers than we had expected. But the cloud offers so much in terms of being able to offer products to customers much more quickly. We can do in a day what used to take several weeks. So if you want to purchase something from us, we can get that to you really quickly. So that's very, very important. And just speed and ease of use is so much better, time to market so much shorter. So we still have a few transitions to make, but we've got that all in the plan for this year. Few things moving over into next year. And some of our applications like the ones we're running for in-house finance and so on, we thought about that, could move to cloud, but maybe we can just keep some of that on-prem. So you look at your on-premises. You can look at that balance and make sure that you have it right. But the first order of business is to make sure that everything that's customer-facing that needs to be in the cloud is there. And I think we're moving through that very effectively.

Got it. The other -- you mentioned ESG and Truvalue Labs. I think Truvalue Labs was kind of the first foray for FactSet into ESG. Since you came from MSCI, where ESG is obviously a very big thing, can you talk to us a little bit about what should we be looking for FactSet to get bigger in ESG? How does that happen?

Yes. I think the difference with FactSet is we're drawing data from 20 different sources. And you can either purchase data about ESG or you can look at various scoring mechanisms. You can also use the data to think about looking at those scoring mechanisms and changing them if you don't like the waiting on them. We've had very good success with consulting firms and the big 4 accounting firms, looking at data purchases because they would like to create their own ESG scoring mechanisms themselves. And we're fine with that. That's a very good way to sell data. So we're looking at both an outside-in focus on companies. And then we're thinking about the inside-out focus as reporting increases due to new SEC rules. So we're working on capturing that as well. And Truvalue Labs has a wealth of deep data on ESG. So we're working on that quite hard. It's one of our focus investment areas for this next year, and we've been very happy with Truvalue Labs.

Got it. The way you report on a quarterly basis at least to us is you break out ESG by buy side and sell side. And so maybe, again, just to start with, what does that mix look like? And how much of -- like what's in buy side and sell side technically, I guess?

Sure. Helen spoke, I think, pretty effectively about the different firm type focus at Investor Day. And I think it's pretty important that FactSet not be viewed as focusing totally on one or the other. I think we're selling to all sorts of financial institutions and corporates other than financial institutions right now. And this idea that the number of hires in financial services companies is critically important to us, I think that's kind of an older idea that we're moving away from. So we found that adoption has been very, very good, both by financial services companies and other companies, because of this idea of big data and the well-concorded data that we have. So for example, if companies want to set up data lakes, other financial services companies, for example, we're able to provide that because we've already done all that hard work so they don't have to do it themselves. So in terms of buy and sell side, we're tilted toward the sell side. But that isn't something which is immobile from our point of view.

Yes. The buy side, you mean?

The buy side.

Yes. 85%...

I apologize. Early start here in London.

So -- and I have a few more questions, obviously, but if anybody has anything, just raise your hand. But I wanted to start framing that question with a broader question around recession, resiliency and so forth. It sounds like you're not seeing any signs of that in your business today, like a lot of other corporates have said. But where is that risk to that 8% to 9% if things slow down? Like do you lose some pricing power? Or does it have to be that your customers go out of business?

I think there might be consolidation amongst customers, which is a manageable problem for the most part. But we did find some interesting information. If you look back 2007, '08 and '09, FactSet's EPS growth, focusing on 2008 and '09, was 19% and 5% when the S&P was down 22% and 41%. So it shows the resilience of the business model, which is heavy recurring revenue focus, with more than 95% of those revenues coming from recurring business. So we think that shows some pretty good stability through the financial crisis. And we would hope anything that comes at us, we would be able to maintain the financial effectiveness of the company no matter sort of what comes our way. But we will have to see. Obviously, this is a significant period of interest rate tightening. And it's -- with the 3-year -- the tenure at 3% is not unseen in the last 20 years, and the tenure has tended to come back down off that level. We will see what happens next, but we think we're well prepared.

Got it. Any questions here? So Linda, when you came in, I think a lot of us -- the view is that margins and balance sheet, you're going to "fix that." And you're obviously making a lot of good progress like we've spoken about. But what else are you focused or perhaps looking to be in charge of in terms of FactSet's next chapter?

Sure. I think FactSet can do a better job of explaining how those investment dollars that we spent in 2019 have linked to the very strong ASV growth that we have been able to demonstrate. And I think Phil Snow did a good job of describing this at Investor Day. The effort has worked. Digitization was the biggest part of that, and deep sector and some of the work we did in private markets investments. But we could do a better job of laying out for the investor what are the investments that we're making and what are we hoping to gain from those investments. And I think with some work within the financial mechanics of the company, we can better tag those investments and make that journey clearer for the investors so they know what they're going to be looking for in the future. And I think we've done a better job at that, but we could always tighten up the story. Also, we're looking to get some productivity improvements from the businesses. And that's sort of a -- it can be termed sort of reducing our run-the-bank expenses and moving to sort of change the bank or change the firm kinds of investments. And obviously, the better we do with those productivity improvements, the more we'll be able to drive those investment funding. So we're just starting on this journey with Kristy Karnovsky, who's looking at all of the products and thinking about what we want to do. Another big focus for FactSet is we need to think about a few things that perhaps haven't gone quite as well and we may want to stop or dial down in terms of investments. So it's getting to those areas of highly popular and profitable products and directing our investment there. So I think with Kristy's help, I think we're going to make a lot of progress. We're just about to begin this process when we head back to New York. It's an exciting time, and we're very optimistic about the future.

And these underperforming areas you're referring to, is that investments that are not generating revenue yet or product areas that you need to prune?

It's probably more legacy product areas that may be, frankly, a bit longer in the tooth and are -- have been replaced by newer versions of things or newer bundles of things. So if a product is a bit more orphaned, we might need to take a look at that and see what we need to do next with those products. And that's the focus now.

Okay. So on the balance sheet, you mentioned you have about 3.9x post CUSIP. You need to get back to 2, 2.5x. FactSet's always been a net cash company for as long as I remember. Is that the new norm now, 2, 2.5?

Yes. We have said that, that is our target. We're extremely pleased to have investment-grade ratings from Moody's and from Fitch. We think for this industry, that is the right capital structure. Not a huge difference, but we think the balance sheet can handle some reasonable amount of debt. We have a shelf registration now. We are well known at this point to public bond investors, which is a different group of investors. Our inaugural deal was 6x oversubscribed, which was a very attractive thing. We were able to price it very attractively. And we think it just provides another arrow in the quiver for FactSet to be able to function well in the public markets. So we're not looking to do anything dramatically different than where we are right now except to come down into that 2.5x to 2x gross leverage. And that will occur about a year from now. And at that point, we'll discuss the path for resuming share repurchases and potentially looking at some bigger opportunities. But for now, we're looking at partnerships and very more limited tuck-in acquisitions. And we're getting the FactSet-CUSIP integration right, which is really -- it's the biggest acquisition we've ever done by many times. So we want to get this one under our belts, and then we're excited about what the future holds.

And to that point on public bond investors, et cetera, I know having been at Moody's for 12-plus years, you couldn't fathom the fact that a company doesn't have a credit rating. And I think you got timing worked out with your CUSIP and you got it. But can you maybe just help appreciate what that credit rating and that access means to a company like FactSet?

Sure. A number of things. It makes it clear to potential sellers of businesses that FactSet would be capable of moving quickly, for example, in an auction process. As a counterparty to other firms, we're now publicly rated. So it says a lot about the credit quality, the integrity and the financial soundness of FactSet, which is very, very important. It allows us to communicate with this large pool of bond investors in the world, fixed income investors. I think it makes us more understandable to fixed income investors. So a lot of great things that come out of that. A better optimized capital structure, I think, is an important thing. And we're very happy to have been through that process. So a happy outcome all around.

Got it. And then the last question I have for you is just around -- I know you said right now there will be more tuck-in acquisitions. But longer term, the question is around the appetite for larger deals. Because I think in hindsight, we would say that FactSet missed out on a few golden opportunities and maybe they just didn't have the appetite or aggression. But going forward, will you be in the bidding for bigger assets if they're available?

I think that's up to Phil Snow and our Board of Directors. But certainly, having the balance sheet capability and the debt issuance capability would make that more feasible if Phil and the Board decide that, that is the right way to go. FactSet is very pleased with everything it's achieved. We like being a public company. We very much intend to remain independent. And we think that this capital structure is going to help us a lot in continuing that journey for the company.

Got it. Great. Well, unless there's any questions here, then we'll just wrap it up here. So thank you so much, Linda, for being here.

You're welcome. And great to join you.

Yes. Thank you, guys.