What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-07-01 compared with 2022-04-04 · 341 added, 281 removed, 290 unchanged (68% of the section changed)

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For over 40 years, the FactSet platform has delivered expansive data, sophisticated analytics, and flexible technology that global financial professionals need to power their critical investment workflows.

More than 171,000 investment professionals including asset managers, asset owners, bankers, wealth managers, corporate users, private equity and venture capital professionals, and others use our personalized solutions to identify opportunities, explore ideas, and gain a competitive advantage.

Approximately 174,000 investment professionals including asset managers, asset owners, bankers, wealth managers, corporate users, private equity and venture capital professionals, and others use our personalized solutions to identify opportunities, explore ideas, and gain a competitive advantage.

Our solutions span investment research, portfolio construction and analysis, trade execution, performance measurement, risk management, and reporting across the investment lifecycle.

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We combine dedicated client service with open and flexible technology offerings, such as a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions, and application programming interfaces ("APIs").

We are a central figure within the global securities marketplace and a foundation for security master files relied on by critical front, middle and back-office functions around the world through CUSIP Global Services ("CGS").

Our revenues are primarily derived from subscriptions to our products and services such as workstations, portfolio analytics, and market data.

We advance our industry by comprehensively understanding our clients’ workflows, solving their most complex challenges, and helping them achieve their goals.

By providing them with the leading open content and analytics platform, an expansive universe of concorded data they can trust, next-generation workflow support designed to help them grow and see their next best action, and the industry’s most committed service specialists, we put our clients in a position to outperform.

By providing them with the leading open content and analytics platform, an expansive universe of connected data they can trust, next-generation workflow support designed to help them grow and see their next best action, and the industry’s most committed service specialists, we put our clients in a position to outperform.

We are focused on growing our business through three reportable segments ("segments"):

the Americas, EMEA and Asia Pacific.

Refer to Note 16, Segment Information , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.

Refer to Note 17, Segment Information for further discussion.

Within each of our segments, we deliver insight and information through our three workflows:

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Analytics & Trading;

Fiscal 2022 Second Quarter in Review

Revenues in the second quarter of fiscal 2022 were $431.1 million, an increase of 10.0% from the prior year period.

Revenues increased across each of our geographic segments, primarily in the Americas, followed by EMEA and Asia Pacific, supported by increased revenues in all our workflow solutions, mainly in Research & Advisory, followed by Analytics & Trading and CTS.

Organic revenues contributed to 9.9% of the growth during the second quarter of fiscal 2022, compared with the prior year period.

Organic revenues exclude the effects of acquisitions and dispositions completed in the last 12 months, the impacts of foreign currency movements on the current year period and the amortization of deferred revenues' fair value adjustments from purchase accounting.

Fiscal 2022 Third Quarter in Review

Revenues in the third quarter of fiscal 2022 were $488.8 million, an increase of 22.3% from the prior year period.

Revenues increased across each of our geographic segments, primarily in the Americas, followed by EMEA and Asia Pacific, supported by increased revenues in all our workflow solutions, mainly in CTS, followed by Research & Advisory and Analytics & Trading.

Organic revenues contributed 10.5% of the growth during the third quarter of fiscal 2022, compared with the prior year period.

Organic revenues exclude revenue related to acquisitions and dispositions completed in the last 12 months, the amortization of deferred revenues' fair value adjustments from purchase accounting related to acquisitions prior to fiscal 2022, and the impacts of foreign currency movements on the current year period.

Acquisitions during fiscal 2022 and all future acquisitions will be accounted for in accordance with our adoption of ASU 2021-08 and will not include a fair value adjustment.

Refer to Note 3 ,

Recent Accounting Pronouncements for more information on ASU 2021-08.

Refer to Non-GAAP Financial Measures in Part I, Item 2 of this Quarterly Report on Form 10-Q for a reconciliation between revenues and organic revenues.

As of February 28, 2022, organic annual subscription value ("Organic ASV") plus Professional Services totaled $1.74 billion, an increase of 9.4% over February 28, 2021.

Organic ASV increased across all our segments with the majority of the increase

related to the Americas, followed by EMEA and Asia Pacific.

As of May 31, 2022, organic annual subscription value ("Organic ASV") plus Professional Services totaled $1.77 billion, an increase of 10.1% over May 31, 2021.

Organic ASV increased across all our segments, with the majority of the increase related to the Americas, followed by EMEA and Asia Pacific, supported by increases in our workflow solutions, mainly Research & Advisory, followed by Analytics & Trading and CTS.

Refer to Annual Subscription Value in Part I, Item 2 of this Quarterly Report on Form 10-Q for the definitions of Organic ASV and Organic ASV plus Professional Services.

Operating income grew 6.2% and diluted earnings per share ("EPS") increased 13.6% for the three months ended February 28, 2022 compared with the prior year period.

Operating margin decreased to 28.6% during the three months ended February 28, 2022 compared with 29.6% in the prior year period.

This decrease in operating margin on a year-over-year basis was primarily due to impairment charges related to vacating certain leased office space and higher professional fees driven by costs incurred in preparation for the acquisition of CUSIP Global Services (“CGS"), partially offset by growth in revenues and lower costs related to employee compensation and computer depreciation, when expressed as a percentage of revenue.

Operating income decreased 17.4% and diluted earnings per share ("EPS") decreased 26.3% for the three months ended May 31, 2022 compared with the prior year period.

Operating margin decreased to 19.9% during the three months ended May 31, 2022 compared with 29.5% in the prior year period.

This decrease in operating margin on a year-over-year basis was primarily due to impairment charges related to vacating certain leased office space, higher professional fees driven by costs incurred in connection with the acquisition of CGS, higher amortization of intangibles related to amortization of acquired intangibles and higher royalty fees related to certain contracts acquired as part of the acquisition of CGS, partially offset by growth in revenues and lower costs related to employee compensation, when expressed as a percentage of revenue.

CUSIP Global Services Acquisition

On December 24, 2021, we entered into a definitive agreement to acquire CGS, previously operated by S&P Global Inc.

on behalf of the American Bankers Association, for $1.925 billion in cash, subject to a working capital adjustment.

on behalf of the American Bankers Association, for $1.932 billion in cash, inclusive of preliminary working capital adjustments.

The acquisition was completed on March 1, 2022.

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CGS will function as part of CTS.

The purchase price for the CGS acquisition was financed from the net proceeds of the issuance of the Notes and borrowings under the 2022 Credit Agreement.

In connection with the entry into the 2022 Credit Agreement, on March 1, 2022, we entered into the 2022 Swap Agreement and repaid in full and terminated the 2019 Credit Agreement and the 2020 Swap Agreement .

Refer to Note 17, Subsequent Events , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on these defined terms, our acquisition of CGS, the issuance of the Notes, the 2022 Credit Agreement and the 2022 Swap Agreement.

The purchase price for the CGS acquisition was financed from the net proceeds of the issuance of the Senior Notes and borrowings under the 2022 Credit Facilities.

Refer to Note 7, Acquisitions and Note 11, Debt for more information on these defined terms as well as our acquisition of CGS, the Senior Notes and the 2022 Credit Facilities.

COVID-19 Update

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In response to the COVID-19 pandemic, we implemented a business continuity plan with a dedicated incident management team to respond quickly and provide ongoing guidance so that we could continue offering our clients uninterrupted products, services and support while also protecting our employees.

We believe these actions have been successful and that the pandemic, and our responses, have not significantly affected our financial results for the three months ended February 28, 2022.

We believe these actions have been successful and that the pandemic, and our responses, have not significantly affected our financial results for the three months ended May 31, 2022.

At the outset of the pandemic, we required the vast majority of our employees at our offices across the globe (including our corporate headquarters) to work remotely and implemented global travel restrictions for our employees.

Since that time, we have begun to re-open many of our offices globally with a focus on safety, while acting consistently with applicable local regulations.

Since that time, we have re-opened many of our offices globally with a focus on safety, while acting consistently with applicable local regulations.

We anticipate that the ability to open offices will vary significantly from region to region based on a number of factors, including the availability of COVID-19 vaccines and the spread of COVID-19 variants.

Our offices will not re-open fully until local authorities permit us to do so and our own criteria and conditions to ensure employee health and safety are satisfied.

As of February 28, 2022, there have been minimal interruptions in our ability to provide our products, services and support to our clients.

As of May 31, 2022, there have been minimal interruptions in our ability to provide our products, services and support to our clients.

Working remotely has had relatively little impact on the productivity of our employees, including our ability to gather content.

We continue to work closely with our clients to provide consistent access to our products and services and have remained flexible to achieve client priorities.

Based on our success working in a remote environment during the COVID-19 pandemic, we have implemented a new work standard under which employees in many of our locations, where permitted by local laws and regulations, and where the role permits, will have the opportunity to choose between different work arrangements.

These include working in a hybrid arrangement, where an employee can split time between working from the office and working from a pre-approved remote location, or a fully remote arrangement, where an employee can work entirely from a pre-approved remote location.

Based on our success working in a remote environment during the COVID-19 pandemic, we have implemented a new work standard under which employees in many of our locations, where permitted by local laws and regulations, and where the role permits, have the opportunity to choose between different work arrangements.

These include working in a hybrid arrangement,

where an employee can split time between working from the office and working from a pre-approved remote location, or a fully remote arrangement, where an employee can work entirely from a pre-approved remote location.

Our revenues, earnings, and ASV are relatively stable and predictable as a result of our subscription-based business model.

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Given our transition to our new work standard, we anticipate that many of these expense reductions will continue going forward, including incurring less travel and entertainment spending than we did pre-pandemic.

We also are reassessing our real estate footprint to better reflect these new work arrangements and seeking to reduce our spending on office space that will no longer be necessary.

We also reassessed our real estate footprint in light of these new work arrangements and have exited office space that we believe will no longer be necessary.

For the nine months ended May 31, 2022, we recognized $62.2 million in impairment charges related to vacating certain leased office space to resize our real estate footprint for the hybrid work environment.

While we will continue to evaluate our real estate needs, we expect that this initiative is largely complete, and we do not currently anticipate additional similar ly-sized real estate impairment charges as part of the reduction of our real estate footprint.

Refer to Item 1A.

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On March 18, 2022, we announced that we are discontinuing all commercial operations and delivery of products and services to clients inside Russia.

In addition, we have identified all active vendors in Russia and are terminating our contracts with them.

In addition, we have identified all active vendors in Russia and have terminated our contracts with them.

We have suspended all new business, trials, and prospecting activities in Russia.

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Organic ASV plus Professional Services

The following table presents the calculation of Organic ASV plus Professional Services as of February 28, 2022.

The following table presents the calculation of Organic ASV plus Professional Services as of May 31, 2022.

With proper notice provided as contractually required, our clients can add to, delete portions of, or terminate service, subject to certain limitations.

(in millions) As of February 28, 2022

(in millions) As of May 31, 2022

As reported ASV plus Professional Services (1)

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Organic ASV plus Professional Services growth rate 10.1 %

(1) Includes $24.2 million in Professional Services as of February 28, 2022.

(1) Includes $24.4 million in Professional Services as of May 31, 2022.

(2) The impact from foreign currency movements.

(3) Acquired ASV from acquisitions completed within the last 12 months.

As of February 28, 2022, Organic ASV plus Professional Services was $1.74 billion, an increase of 9.4% compared with February 28, 2021.

The increase in year-over-year Organic ASV was largely attributed to existing clients, followed by new client sales, and price increases, partially offset by existing client cancellations.

As of May 31, 2022, Organic ASV plus Professional Services was $1.77 billion, an increase of 10.1% compared with May 31, 2021.

The increase in year-over-year Organic ASV was largely attributed to increased sales to existing clients, inclusive of price increases, followed by new client sales, partially offset by existing client cancellations.

Organic ASV increased across all our geographic segments, with the majority of the increase related to the Americas, followed by EMEA and Asia Pacific.

This increase was driven by additional sales in our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS.

This increase was driven by additional sales in our workflow solutions, primarily Research & Advisory, followed by Analytics & Trading and CTS.

Sales increased in Research & Advisory mainly due to higher demand for our workstations.

Sales increased in Analytics & Trading mainly from our portfolio analytics solutions and performance and reporting products.

C TS sales increased primarily due to company financial data, such as fundamentals and estimates, along with data management solutions to empower data connectivity.

As of February 28, 2022, ASV from the Americas represented 62.9% of total ASV and was $1,085.6 million, an increase from $985.2 million as of February 28, 2021.

Americas Organic ASV increased to $1,079.3 million as of February 28, 2022, a 9.6% increase compared with February 28, 2021.

As of February 28, 2022, ASV from EMEA was $459.9 million, representing 26.6% of total ASV, an increase from $427.6 million as of February 28, 2021.

EMEA Organic ASV increased to $459.6 million as of February 28, 2022, a 7.8% increase compared with February 28, 2021.

As of February 28, 2022, Asia Pacific ASV was $180.5 million, representing 10.5% of total ASV, an increase from $159.8 million as of February 28, 2021.

Asia Pacific Organic ASV increased to $180.9 million as of February 28, 2022, a 14.3% increase compared with February 28, 2021.

The increase in Organic ASV across all our segments was largely attributed to increased sales to existing clients, followed by new client sales and price increases, partially offset by existing client cancellations.

Sales increased in Analytics & Trading mainly from demand for our portfolio analytics solutions and performance and reporting products.

CTS sales increased primarily due to purchases of company financial data, such as fundamentals, estimates and ownership, along with data management solutions to empower data connectivity.

As of May 31, 2022, ASV from the Americas represented 64% of total ASV and was $1,220.4 million, an increase from $993.4 million as of May 31, 2021.

Americas Organic ASV increased to $1,093.4 million as of May 31, 2022, a 10.1% increase compared with May 31, 2021.

As of May 31, 2022, ASV from EMEA represented 26% of total ASV and was $503.1 million, an increase from $436.4 million as of May 31, 2021.

EMEA Organic ASV increased to $471.0 million as of May 31, 2022, a 8.3% increase compared with May 31, 2021.

As of May 31, 2022, ASV from Asia Pacific represented 10% of total ASV and was $192.0 million, an increase from $163.4 million as of May 31, 2021.

Asia Pacific Organic ASV increased to $186.1 million as of May 31, 2022, a 14.3% increase compared with May 31, 2021.

The increase in Organic ASV across all our segments was largely attributed to increased sales to existing clients, inclusive of price increases, followed by new client sales, partially offset by existing client cancellations.

Organic ASV increased in the Americas primarily due to higher sales in Research & Advisory, followed by Analytics & Trading.

EMEA Organic ASV increased due to higher sales in Research & Advisory, followed by CTS and Analytics & Trading.

The increase in Asia Pacific Organic ASV was mainly driven by higher sales in Research & Advisory, followed by Analytics & Trading and CTS.

The increase in Asia Pacific Organic ASV was driven by higher sales in Research & Advisory, followed by Analytics & Trading and CTS.

Buy-side and Sell-side Organic ASV Growth

Buy-side and sell-side Organic ASV growth rates at February 28, 2022, compared with February 28, 2021, were 8.8% and 12.9%, respectively.

Buy-side clients account for approximately 84% of our Organic ASV, consistent with the prior year period, and primarily include asset managers, wealth managers, asset owners, channel partners, hedge funds, and corporate firms.

The remainder of our Organic ASV is derived from sell-side firms, and primarily include broker-dealers, banking and advisory, private equity and venture capital firms.

Buy-side and sell-side Organic ASV growth rates at May 31, 2022, compared with May 31, 2021, were 9.6% and 12.9%, respectively.

Buy-side clients account for approximately 84% of our Organic ASV, consistent with the prior year period, primarily including asset managers, wealth managers, asset owners, channel partners, hedge funds, and corporate firms.

The remainder of our Organic ASV is derived from sell-side firms, primarily including broker-dealers, banking and advisory, private equity and venture capital firms.

Client and User Additions

The table below presents our total clients and users:

As of February 28, 2022 As of February 28, 2021 Change

As of May 31, 2022 As of May 31, 2021 Change

7,319 6,172 18.6 %

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(1) The client count includes clients with ASV of $10,000 and above.

Our total client count was 7,172 as of February 28, 2022, a net increase of 17.5%, or 1,069 clients, in the last 12 months, mainly due to an increase in corporate and wealth management clients.

As part of our long-term growth strategy, we continue to focus on expanding and cultivating relationships with our existing client base through our on- and off-platform workflow-focused solutions, connected content and client-focused services.

As of February 28, 2022, there were 171,341 professionals using FactSet, representing a net increase of 11.7%, or 17,986 users, in the last 12 months, driven primarily by an increase of banking and private equity and venture capital clients from the sell-side and asset managers, corporate and wealth management clients from the buy-side.

The increase in users was mainly due to the addition of new clients and increased new hiring at our banking clients.

Annual client retention was greater than 95% of ASV for the period ended February 28, 2022, consistent with the prior year period.

When expressed as a percentage of clients, annual retention was approximately 92% for the period ended February 28, 2022, an improvement from approximately 90% for the period ended February 28, 2021.

Our total client count was 7,319 as of May 31, 2022, a net increase of 18.6%, or 1,147 clients, in the last 12 months, mainly due to an increase in corporate, wealth management and private equity and venture capital clients.

This increase is due to our continued focus on our on- and off-platform workflow-focused solutions, connected content and client-focused services.

As of May 31, 2022, there were 173,698 professionals using FactSet, representing a net increase of 12.1%, or 18,694 users, in the last 12 months, driven primarily by an increase in banking clients from the sell-side, followed by an increase in wealth management clients, asset managers and corporate clients from the buy-side.

The increase in users was mainly due to increased new hiring at our banking clients and the addition of new clients.

Annual client retention was greater than 95% of ASV for the period ended May 31, 2022, consistent with the prior year period.

When expressed as a percentage of clients, annual retention was approximately 92% for the period ended May 31, 2022, an improvement from approximately 91% for the period ended May 31, 2021.

Employee Headcount

As of February 28, 2022, our employee headcount was 10,784, up 1.2% in the past 12 months from 10,660, due primarily to an increase in net new employees of 5.2% in Asia Pacific, partially offset by a decrease of 9.0% in the Americas and 0.1% in EMEA.

Of our total employee headcount at February 28, 2022, 7,147 were located in Asia Pacific, 2,265 were located in the Americas, and 1,372 were located in EMEA.

As of May 31, 2022, our employee headcount was 10,691, a decrease of 0.2% compared with 10,713 employees as of May 31, 2021.

This reduction in headcount was primarily due to a decrease of 6.2% in the Americas and a decrease of 0.1% in EMEA, partially offset by an increase of 1.9% in Asia Pacific.

At May 31, 2022, 7,056 employees were located in Asia Pacific, 2,287 in the Americas, and 1,348 in EMEA.

Results of Operations

For an understanding of the significant factors that influenced our performance for the three and six months ended February 28, 2022 and February 28, 2021, the following discussion should be read in conjunction with the Consolidated Financial Statements and related notes presented in this Quarterly Report on Form 10-Q.

For an understanding of the significant factors that influenced our performance for the three and nine months ended May 31, 2022 and May 31, 2021, the following discussion should be read in conjunction with the Consolidated Financial Statements and related notes presented in this Quarterly Report on Form 10-Q.

The following table summarizes the results of operations for the periods described:

Three Months Ended Six Months Ended

February 28, % Change February 28, % Change

Three Months Ended Nine Months Ended

May 31, % Change May 31, % Change

(in thousands, except per share data) 2022 2021 2022 2021

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Selling, general and administrative $ 119,881 $ 76,599 56.5 % $ 309,185 $ 235,818 31.1 %

Long-lived asset impairments $ 48,998 $ — N/M $ 62,985 $ — N/M

Operating income $ 97,254 $ 117,702 (17.4) % $ 343,263 $ 354,865 (3.3) %

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Diluted weighted average common shares 38,720 38,488 38,607 38,602

Three months ended February 28, 2022 compared with three months ended February 28, 2021

Revenues for the three months ended February 28, 2022 were $431.1 million, an increase of 10.0%.

The increase in revenues were largely attributed to increased sales to existing clients, inclusive of price increases, followed by new client sales, partially offset by existing client cancellations.

Revenues increased across all our geographic segments, primarily from the Americas, followed by EMEA and Asia Pacific, driven by increased revenues in all of our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS, compared with the prior year.

Organic revenues increased to $430.8 million for the three months ended February 28, 2022, a 9.9% increase over the prior year period.

The 10.0% increase in revenues was composed of growth in organic revenues of 9.9% and a 50 basis point increase from deferred revenues fair value adjustments from purchase accounting and acquisition-related revenues, partially offset by a 40 basis point decrease from foreign currency exchange rate fluctuations.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

Revenues for the six months ended February 28, 2022 was $855.8 million, an increase of 9.7%.

The increase in revenues were largely attributed to increased sales to existing clients, inclusive of price increases, followed by new client sales, partially offset by existing client cancellations.

Revenues increased across all our geographic segments, primarily from the Americas, followed by EMEA and Asia Pacific driven by increased revenues in all of our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS, compared with the prior year.

Organic revenues increased to $853.9 million for the six months ended February 28, 2022, a 9.4% increase over the prior year period.

The revenue growth of 9.7% was reflective of organic revenue growth of 9.4%, a 60 basis point increase from deferred revenue fair value adjustments from purchase accounting and acquisition-related revenue, partially offset by a 30 basis point decrease from foreign currency exchange rate fluctuations.

Three months ended May 31, 2022 compared with three months ended May 31, 2021

Revenues for the three months ended May 31, 2022 were $488.8 million, an increase of 22.3%.

The increase in revenues was largely attributable to increased sales to existing clients, inclusive of price increases, followed by new client sales, partially offset by existing client cancellations.

Revenues increased across all our geographic segments, primarily from the Americas, followed by EMEA and Asia Pacific, driven by increased revenues in all of our workflow solutions, primarily in CTS, followed by Research & Advisory and Analytics & Trading, compared with the prior year.

Organic revenues increased to $441.7 million for the three months ended May 31, 2022, a 10.5% increase over the prior year period.

The growth in revenues of 22.3% was composed of growth in organic revenues of 10.5% and a 12.3% increase primarily related to acquisition-related revenues, partially offset by a 0.5% decrease from foreign currency exchange rate fluctuations.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

Revenues for the nine months ended May 31, 2022 was $1,344.6 million, an increase of 14.0%.

Revenues increased across all our geographic segments, primarily from the Americas, followed by EMEA and Asia Pacific, driven by increased revenues in all of our workflow solutions, primarily in CTS and Research & Advisory, followed by Analytics & Trading, compared with the prior year.

Organic revenues increased to $1,295.6 million for the nine months ended May 31, 2022, a 9.8% increase over the prior year period.

The growth in revenues of 14.0% was reflective of organic revenue growth of 9.8% and a 4.5% increase primarily related to acquisition-related revenue, partially offset by a 0.3% decrease from foreign currency exchange rate fluctuations.

Revenues by Segment

Three Months Ended Six Months Ended

February 28, % Change February 28, % Change

Three Months Ended Nine Months Ended

May 31, % Change May 31, % Change

(in thousands) 2022 2021 2022 2021

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Consolidated $ 488,751 $ 399,558 22.3 % $ 1,344,595 $ 1,179,551 14.0 %

Three months ended February 28, 2022 compared with three months ended February 28, 2021

Revenues from our Americas segment increased 10.4% to $273.7 million during the three months ended February 28, 2022, compared with $248.0 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS.

The growth in revenues of 10.4% was reflective of increased organic revenues of 10.3% and a 10 basis point increase related to deferred revenues fair value adjustments from purchase accounting and acquisition-related revenues.

Revenues from our EMEA segment increased 8.6% to $114.6 million during the three months ended February 28, 2022, compared with $105.5 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS.

The growth in revenues of 8.6% was reflective of increased organic revenues of 9.5%, partially offset by a 90 basis point decrease related to foreign currency exchange rate fluctuations.

Revenues from our Asia Pacific segment increased 11.9% to $42.9 million during the three months ended February 28, 2022, compared with $38.3 million from the same period a year ago.

The increased revenues were driven by increased sales across all of our workflow solutions of Analytics & Trading, Research & Advisory and CTS.

The growth in revenues of 11.9% was reflective of increased organic revenues of 13.7%, partially offset by a 180 basis point decrease related to foreign currency exchange rate fluctuations.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

Revenues from our Americas segment increased 9.8% to $540.6 million during the six months ended February 28, 2022, compared with $492.3 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS.

The revenues growth of 9.8% was due to organic revenue growth of 9.6% and a 20 basis point increase from deferred revenue fair value adjustments from purchase accounting and acquisition-related revenue.

Revenues from our EMEA segment increased 8.7% to $229.6 million during the six months ended February 28, 2022, compared with $211.3 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS.

The revenues growth of 8.7% was driven by organic revenue growth of 9.1% and a 10 basis point increase from deferred revenue fair value adjustments from purchase accounting, partially offset by a 50 basis point decrease from foreign currency exchange rate fluctuations.

Revenues from our Asia Pacific segment increased 12.1% to $85.7 million during the six months ended February 28, 2022, compared with $76.4 million from the same period a year ago.

The increased revenues were driven by higher sales across all of our workflow solutions of Analytics & Trading, Research & Advisory and CTS.

The revenues growth of 12.1% was due mainly to organic revenues growth of 13.7%, partially offset by a 160 basis point decrease from foreign currency exchange rate fluctuations.

Three months ended May 31, 2022 compared with three months ended May 31, 2021

Revenues from our Americas segment increased 22.0% to $309.7 million during the three months ended May 31, 2022, compared with $253.8 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in Research & Advisory and CTS, followed by Analytics & Trading.

The growth in revenues of 22.0% was reflective of increased organic revenues of 7.4% and a 14.6% increase primarily due to the impact of acquisition-related revenues.

Revenues from our EMEA segment increased 20.1% to $128.3 million during the three months ended May 31, 2022, compared with $106.8 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in CTS, followed by Research & Advisory and Analytics & Trading.

The growth in revenues of 20.1% was reflective of increased organic revenues of 13.2% and an 8.2% increase primarily due to the impact of acquisition-related revenues, partially offset by a 1.3% decrease related to foreign currency exchange rate fluctuations.

Revenues from our Asia Pacific segment increased 30.2% to $50.7 million during the three months ended May 31, 2022, compared with $38.9 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in CTS, followed by Research & Advisory and Analytics & Trading.

The growth in revenues of 30.2% was reflective of increased organic revenues of 23.6% and an 8.9% increase due to the impact of acquisition-related revenues, partially offset by a 2.3% decrease related to foreign currency exchange rate fluctuations.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

Revenues from our Americas segment increased 14.0% to $850.3 million during the nine months ended May 31, 2022, compared with $746.1 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in CTS and Research & Advisory, followed by Analytics & Trading.

The growth in revenues of 14.0% was due to organic revenue growth of 8.4% and a 5.6% increase primarily due to the impact of acquisition-related revenue.

Revenues from our EMEA segment increased 12.5% to $357.9 million during the nine months ended May 31, 2022, compared with $318.1 million from the same period a year ago.

The increased revenues were driven by higher sales in all of our workflow solutions, primarily in CTS, followed by Research & Advisory and Analytics & Trading.

The growth in revenues of 12.5% was driven by organic revenue growth of 10.5% and a 2.7% increase primarily due to the impact of acquisition-related revenue, partially offset by an 0.7% decrease from foreign currency exchange rate fluctuations.

Revenues from our Asia Pacific segment increased 18.2% to $136.4 million during the nine months ended May 31, 2022, compared with $115.3 million from the same period a year ago.

The increased revenues were driven by higher sales across all of our workflow solutions, primarily in CTS, followed by Analytics & Trading and Research & Advisory.

The growth in revenues of 18.2% was due mainly to organic revenues growth of 17.0% and a 3.0% increase from acquisition-related revenue, partially offset by a 1.8% decrease from foreign currency exchange rate fluctuations.

Revenues by Workflow Solution

Three months ended February 28, 2022 compared with three months ended February 28, 2021

The growth in revenues of 10.0% across our segments was driven by increased revenues from all of our workflow solutions, primarily from sales of Research & Advisory, followed by Analytics & Trading and CTS, for the three months ended February 28, 2022, compared with the same period a year ago.

The increase in Research & Advisory was driven mainly by higher demand for our workstations.

The increase in revenues from Analytics & Trading was primarily due to increased demand for our performance and reporting products and portfolio analytics solutions.

The increase in CTS revenues was driven mainly by increased sales of company financial data, such as fundamentals and estimates, along with data management solutions.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

The revenues growth of 9.7% across our segments for the six months ended February 28, 2022 compared with the same period a year ago was primarily driven by increased sales of Research & Advisory, followed by Analytics & Trading and CTS.

The increase in Research & Advisory was driven mainly by higher demand for our workstations.

Three months ended May 31, 2022 compared with three months ended May 31, 2021

The growth in revenues of 22.3% for the three months ended May 31, 2022, compared with the same period a year ago, was due to revenue growth across each of our segments supported by increased revenues from our workflow solutions, primarily from CTS, followed by Research & Advisory and Analytics & Trading.

The increase in CTS revenues was driven mainly by sales of company financial data, such as fundamentals, estimates and ownership, and the inclusion of CUSIP related data licensing and issuance revenues.

The increase in Research & Advisory revenues was driven mainly by higher demand for our workstations.

The increase in revenues from Analytics & Trading was primarily due to increased demand for our portfolio analytics solutions.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

The growth in revenues of 14.0% for the nine months ended May 31, 2022, compared with the same period a year ago, was due to revenue growth across our segments supported by increased revenues from our workflow solutions, primarily from CTS and Research & Advisory, followed by Analytics & Trading.

The increase in CTS revenues was driven mainly by increased purchases of company financial data, such as fundamentals, estimates and ownership, and the inclusion of CUSIP related data licensing and issuance revenues.

The increase in Research & Advisory revenues was driven mainly by higher demand for our workstations.

The increase in Analytics & Trading revenues was mainly due to increased sales of our performance and reporting products and portfolio analytics solutions.

The increase in CTS revenues was driven mainly by increased sales of core and premium content sets, specifically related to company financial data and data management solutions.

Operating Expenses

Three Months Ended Six Months Ended

February 28, February 28, % Change

Three Months Ended Nine Months Ended

May 31, May 31, % Change

(in thousands) 2022 2021 % Change 2022 2021

1 unchanged sentence

Selling, general and administrative 119,881 76,599 56.5 % 309,185 235,818 31.1 %

Long-lived asset impairments 48,998 — N/M 62,985 — N/M

Total operating expenses $ 391,497 $ 281,856 38.9 % $ 1,001,332 $ 824,686 21.4 %

2 unchanged sentences

Cost of Services

Three months ended February 28, 2022 compared with three months ended February 28, 2021

Cost of services increased 2.0% to $199.4 million for the three months ended February 28, 2022, compared with $195.5 million in the same period a year ago, primarily due to an increase in employee compensation expense, computer-related expenses and amortization of intangible assets, partially offset by computer depreciation.

Cost of services, when expressed as a percentage of revenues, was 46.3% for the three months ended February 28, 2022, a decrease of 370 basis points compared with the same period a year ago.

This decrease was primarily due to lower employee compensation expense and lower computer depreciation expenses as a percentage of revenue.

Employee compensation expense decreased 260 basis points due primarily to growth in revenues outpacing the growth of employee compensation expense and a shift in headcount distribution from higher to lower cost locations, partially offset by higher base salaries, a net increase in employee headcount of 51 and higher stock-based compensation expense.

Computer depreciation expenses decreased 30 basis points, primarily driven by fully depreciated network-related equipment that is not being replaced due to our migration to cloud-based hosting services.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

For the six months ended February 28, 2022, cost of services increased 6.0% to $406.5 million compared with $383.6 million in the same period a year ago, primarily due to an increase in computer-related expenses, employee compensation expense, including stock-based compensation, amortization of intangible assets and data costs.

Cost of services, when expressed as a percentage of revenues, was 47.5% for the six months ended February 28, 2022, a decrease of 170 basis points compared with the same period a year ago.

This decrease was primarily driven by lower employee compensation expense, partially offset by higher computer-related expenses and amortization of intangible assets as a percentage of revenue.

Employee compensation expense decreased 200 basis points, primarily due to growth in revenues outpacing the growth of employee compensation expense and a shift in headcount distribution from higher to lower cost locations.

This decrease in employee compensation was partially offset by a one-time restructuring charge to drive organizational realignment, higher stock-based compensation expense and annual base salaries, and a net increase in employee headcount of 51.

Computer-related expenses increased 70 basis points primarily due to increased spend from our migration to cloud-based hosting services and licensed software arrangements.

Amortization of intangible assets increased 30 basis points mainly due to continued investment in capitalized internal-use software, with more assets placed in service.

Three months ended May 31, 2022 compared with three months ended May 31, 2021

Cost of services increased 8.5% to $222.6 million for the three months ended May 31, 2022, compared with $205.3 million in the same period a year ago, primarily due to an increase in amortization of intangible assets and royalty fees, partially offset by a decrease in employee compensation expense.

Cost of services, when expressed as a percentage of revenues, was 45.5% for the three months ended May 31, 2022, a decrease of 580 basis points compared with the same period a year ago.

This decrease was primarily due to lower employee compensation expense, partially offset by an increase in amortization of intangible assets and royalty fees.

Employee compensation expense decreased 740 basis points, due primarily to a shift in headcount distribution from higher to lower cost locations and a net reduction in cost of services employee headcount of 138, partially offset by higher base salaries.

Amortization of intangible assets increased 230 basis points mainly due to increased amortization related to acquired intangible

Royalty fees increased cost of services by 170 basis points due to contracts acquired in connection with the acquisition of CGS.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

For the nine months ended May 31, 2022, cost of services increased 6.8% to $629.2 million compared with $588.9 million in the same period a year ago, primarily due to an increase in amortization of intangible assets, computer-related expenses, royalty fees, employee compensation expense and data costs.

Cost of services, when expressed as a percentage of revenues, was 46.8% for the nine months ended May 31, 2022, a decrease of 310 basis points compared with the same period a year ago.

This decrease was primarily driven by lower employee compensation expense and data costs, partially offset by higher amortization of intangible assets and royalty fees as a percentage of revenue.

Employee compensation expense decreased 390 basis points, primarily due to a shift in headcount distribution from higher to lower cost locations and a net reduction in cost of services employee headcount of 138, partially offset by higher annual base salaries, a one-time restructuring charge to drive organizational realignment and a decrease in capitalization of compensation costs related to development of our internal-use software projects.

Data costs decreased 50 basis points, primarily due to revenue growth outpacing the cost of content, partially offset by a non-recurring charge for certain data content.

Amortization of intangible assets increased 100 basis points, mainly due to higher amortization related to acquired intangibles and increased amortization from capitalized internal-use software.

Royalty fees increased cost of services 60 basis points due to contracts acquired in connection with the acquisition of CGS.

Selling, General and Administrative

Three months ended February 28, 2022 compared with three months ended February 28, 2021

Selling, general and administrative ("SG&A") expenses increased 35.2% to $108.4 million for the three months ended February 28, 2022, compared with $80.1 million for the same period a year ago, primarily due to impairment charges related to vacating certain leased office space and higher employee compensation expense and professional fees.

SG&A expenses, when expressed as a percentage of revenues, were 25.1% for the three months ended February 28, 2022, an increase of 470 basis points over the prior year period.

This increase was primarily due to impairment charges related to vacating certain leased office space, higher professional fees and higher employee compensation expense as a percentage of revenue.

The impairment charges resulted in a 240 basis point increase to SG&A expenses driven mainly by impairments to our lease right-of-use ("ROU") assets and Property, equipment and leasehold improvements associated with vacating certain leased office space.

Professional fees increased 90 basis points, primarily driven by costs incurred in preparation for the acquisition of CGS.

Employee compensation expense increased 70 basis points primarily due to a net increase in employee headcount of 73, higher annual base salaries and increased variable compensation.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

For the six months ended February 28, 2022, SG&A expenses increased 27.7% to $203.3 million, compared with $159.2 million for the same period a year ago, primarily due to an increase in employee compensation expense, impairment charges related to vacating certain leased office space and higher professional fees.

SG&A expenses, expressed as a percentage of revenues, was 23.8% for the six months ended February 28, 2022, an increase of 330 basis points over the prior year period.

This increase was primarily driven by impairment charges related to vacating certain leased property, higher employee compensation expense and increased professional fees as a percentage of revenue.

The impairment charges resulted in a 90 basis point increase to SG&A expenses driven mainly by impairments to our lease ROU assets and Property, equipment and leasehold improvements associated with vacating certain leased office space.

Employee compensation expense increased 70 basis points, primarily due to higher annual base salaries, a net increase in employee headcount of 73, and increased year-over-year variable compensation.

Professional fees increased 50 basis points, primarily driven by costs incurred in preparation for the acquisition of CGS.

Three months ended May 31, 2022 compared with three months ended May 31, 2021

Selling, general and administrative ("SG&A") expenses increased 56.5% to $119.9 million for the three months ended May 31, 2022, compared with $76.6 million for the same period a year ago, primarily due to higher employee compensation expense and professional fees.

SG&A expenses, when expressed as a percentage of revenues, were 24.5% for the three months ended May 31, 2022, an increase of 540 basis points over the prior year period.

This increase was primarily due to higher professional fees and employee compensation expense as a percentage of revenue.

Professional fees increased 270 basis points, primarily driven by costs incurred in connection with the acquisition of CGS.

Employee compensation expense increased 140 basis points, primarily due to increased variable compensation, a net increase in SG&A employee headcount of 116, increased stock-based compensation expense and higher annual base salaries.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

For the nine months ended May 31, 2022, SG&A expenses increased 31.1% to $309.2 million, compared with $235.8 million for the same period a year ago, primarily due to higher employee compensation expense and professional fees.

SG&A expenses, expressed as a percentage of revenues, were 23.0% for the nine months ended May 31, 2022, an increase of 300 basis points over the prior year period.

This increase was primarily driven by higher professional fees and employee compensation expense as a percentage of revenue.

Professional fees increased 130 basis points, primarily driven by costs incurred in connection with the acquisition of CGS.

Employee compensation expense increased 100 basis points, primarily due to increased variable compensation, a net increase in SG&A employee headcount of 116, higher annual base salaries and higher stock-based compensation expense.

Long-Lived Asset Impairments

Three months ended May 31, 2022 compared with three months ended May 31, 2021

Long-lived asset impairments were $49.0 million, or 10.0% when expressed as a percentage of revenues, for the three months ended May 31, 2022.

The impairment charges related primarily to lease ROU assets and Property, equipment and leasehold improvements ("PPE") associated with vacating certain leased office space.

We fully impaired the lease ROU assets for locations we vacated with no intention to sublease.

We recognized an impairment for locations we intend to sublease when the estimated fair value of the lease ROU asset was less than its carrying value.

Substantially all the PPE associated with the vacated lease office space was fully impaired as there are no expected future cash flows related to these items.

Impairment charges related to our lease ROU assets and PPE were $24.2 million and $24.6 million, respectively, for the three months ended May 31, 2022.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

Long-lived asset impairments were $63.0 million, or 4.7% when expressed as a percentage of revenues, for the nine months ended May 31, 2022.

The impairment charges related primarily to lease ROU assets and PPE associated with vacating certain leased office space.

We fully impaired the lease ROU assets for locations we vacated with no intention to sublease.

We recognized an impairment for locations we intend to sublease when the estimated fair value of the lease ROU asset was less than its carrying value.

Substantially all the PPE associated with the vacated lease office space was fully impaired as there are no expected future cash flows related to these items.

Impairment charges related to our lease ROU assets and PPE were $31.5 million and $30.7 million, respectively, for the nine months ended May 31, 2022.

Operating Income and Operating Margin

Three months ended February 28, 2022 compared with three months ended February 28, 2021

Operating income increased 6.2% to $123.3 million for the three months ended February 28, 2022, compared with $116.1 million in the prior year.

Operating income increased primarily due to growth in revenues of 10.0%, partially offset by impairment charges related to vacating certain leased office space, an increase in employee compensation expense and higher professional fees driven by costs incurred in preparation for the acquisition of CGS.

Three months ended May 31, 2022 compared with three months ended May 31, 2021

Operating income decreased 17.4% to $97.3 million for the three months ended May 31, 2022, compared with $117.7 million in the prior year.

Operating income decreased primarily due to impairment of long-lived assets, higher professional fees, higher amortization of intangible assets, higher employee compensation expense and higher royalty fees, partially offset by growth in revenues of 22.3%.

Foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $1.3 million.

Operating margin decreased to 28.6% during the three months ended February 28, 2022, compared with 29.6% in the prior year period.

Operating margin decreased mainly due to impairment charges related to vacating certain leased office space, professional fees driven by costs incurred in preparation for the acquisition of CGS, partially offset by growth in revenues and lower costs related to employee compensation and computer depreciation.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

Operating income increased 3.7% to $246.0 million for the six months ended February 28, 2022 compared with $237.2 million in the prior year period.

Operating income increased primarily due to growth in revenues of 9.7%, partially offset by increases in employee compensation expense, impairment charges related to vacating certain leased office space and increases in computer-related expenses, professional fees, amortization of intangible assets and data costs.

Operating margin decreased to 19.9% during the three months ended May 31, 2022, compared with 29.5% in the prior year period.

Operating margin decreased mainly due to the impairment of long-lived assets, professional fees, amortization of intangible assets and royalty fees, partially offset by growth in revenues and lower employee compensation expense.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

Operating income decreased 3.3% to $343.3 million for the nine months ended May 31, 2022 compared with $354.9 million in the prior year period.

Operating income decreased primarily due to impairment of long-lived assets, higher employee compensation expense, professional fees, amortization of intangible assets, computer-related expenses, royalty fees and data costs, partially offset by growth in revenues of 14.0%.

Foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $6.7 million.

Operating margin decreased to 28.7% for the six months ended February 28, 2022, compared with 30.4% in the prior year period.

Operating margin decreased primarily due to impairment charges related to vacating certain leased property, computer-related expenses, professional fees and amortization of intangibles, partially offset by lower employee compensation expense.

Operating margin decreased to 25.5% for the nine months ended May 31, 2022, compared with 30.1% in the prior year period.

Operating margin decreased primarily due to impairment of long-lived assets, higher professional fees, amortization of intangible assets and royalty fees, partially offset by growth in revenues and lower employee compensation expense and data costs.

Operating Income by Segment

2 unchanged sentences

and Asia Pacific.

Refer to Note 16, Segment Information , in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion regarding our segments.

Three Months Ended Six Months Ended

February 28, % Change February 28, % Change

Refer to Note 17, Segment Information for further discussion regarding our segments.

Three Months Ended Nine Months Ended

May 31, % Change May 31, % Change

(in thousands) 2022 2021 2022 2021

3 unchanged sentences

Total Operating Income $ 97,254 $ 117,702 (17.4) % $ 343,263 $ 354,865 (3.3) %

Three months ended February 28, 2022 compared with three months ended February 28, 2021

Americas operating income decreased 8.8% to $48.9 million during the three months ended February 28, 2022, compared with $53.6 million in the same period a year ago.

This decrease in operating income was due to impairment charges related to vacating certain leased office space, higher employee compensation expense and professional fees, partially offset by growth in revenues of 10.4%.

The impairment charges related mainly to our lease right-of-use ("ROU") assets and Property, equipment and leasehold improvements associated with vacating certain leased office space.

Employee compensation expense increased mainly due to higher stock compensation expense and increased variable compensation, partially offset by a net decrease in employee headcount of 225.

Professional fees increased primarily due to costs incurred in preparation for the acquisition of CGS.

EMEA operating income increased 14.0% to $45.9 million during the three months ended February 28, 2022, compared with $40.3 million recognized during the same period a year ago.

The increase in EMEA operating income was due to growth in revenues of 8.6%, partially offset by higher employee compensation expense and an increase in our accounts receivable reserves.

Employee compensation expense increased mainly due to increased variable compensation.

Asia Pacific operating income increased 28.2% to $28.5 million during the three months ended February 28, 2022, compared with $22.2 million in the same period a year ago.

This increase in operating income was mainly due to growth in revenues of

11.9%, partially offset by higher employee compensation expense.

Employee compensation expense increased mainly due to higher annual base salaries, a net increase in employee headcount of 351 and increased variable compensation.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

Americas operating income decreased 5.1% to $104.4 million during the six months ended February 28, 2022, compared with $110.0 million in the same period a year ago.

This decrease in operating income was due to higher employee compensation expense, impairment charges related to vacating certain leased office space, higher computer-related expenses, professional fees and amortization of intangible assets, partially offset by growth in revenues of 9.8%.

Employee compensation expense increased primarily due to the impact of a one-time restructuring charge to drive organizational realignment, higher stock compensation expense and increased variable compensation expense, partially offset by a net decrease in employee headcount of 225.

The impairment charges related mainly to our lease right-of-use ("ROU") assets and Property, equipment and leasehold improvements associated with vacating certain leased office space.

Three months ended May 31, 2022 compared with three months ended May 31, 2021

Americas operating income decreased 78.4% to $11.2 million during the three months ended May 31, 2022, compared with $51.8 million in the same period a year ago.

This decrease in operating income was due to an impairment of long-lived assets, higher amortization of intangible assets, professional fees, employee compensation expense and royalty fees, partially offset by growth in revenues of 22.0%.

The impairment charges related mainly to lease ROU assets and PPE associated with vacating certain leased office space.

Amortization of intangible assets increased primarily due to increased amortization related to

acquired intangibles.

Professional fees increased primarily due to costs incurred in connection with the acquisition of CGS.

Employee compensation expense increased mainly due to increased variable compensation, higher stock compensation expense and higher annual base salaries, partially offset by a net decrease in employee headcount of 152.

Royalty fees increased due to contracts acquired in connection with the acquisition of CGS.

EMEA operating income increased 28.4% to $53.2 million during the three months ended May 31, 2022, compared with $41.5 million recognized during the same period a year ago.

The increase in EMEA operating income was due to growth in revenues of 20.1% as well as lower bad debt expense and employee compensation expense, partially offset by an impairment of long-lived assets.

Employee compensation expense decreased mainly due to lower annual base salaries primarily driven by foreign currency exchange rate fluctuations and restructuring charges.

The impairment charges related mainly to our lease ROU assets and PPE associated with vacating certain leased office space.

Asia Pacific operating income increased 34.3% to $32.8 million during the three months ended May 31, 2022, compared with $24.4 million in the same period a year ago.

This increase in operating income was mainly due to growth in revenues of 30.2%, partially offset by higher employee compensation expense.

Employee compensation expense increased mainly due to higher annual base salaries, inclusive of a net increase in employee headcount of 132.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

Americas operating income decreased 28.5% to $115.6 million during the nine months ended May 31, 2022, compared with $161.8 million in the same period a year ago.

This decrease in operating income was due to an impairment of long-lived assets, higher employee compensation expense, professional fees, amortization of intangible assets, computer related expenses and royalty fees, partially offset by growth in revenues of 14.0%.

The impairment charges related mainly to our lease ROU assets and PPE associated with vacating certain leased office space.

Employee compensation expense increased primarily due to increased variable compensation, higher stock compensation expense, the impact of a one-time restructuring charge to drive organizational realignment, and a decrease in capitalization of compensation costs related to development of our internal-use software projects, partially offset by a decrease in annual base salary driven by a net decrease in employee headcount of 152.

Professional fees increased primarily due to costs incurred in connection with the acquisition of CGS.

Amortization of intangible assets increased primarily due to increased amortization related to acquired intangibles, as well as continued investment in capitalized internal-use software, with more assets placed in service.

Computer-related expenses increased primarily due to increased spend from our migration to cloud-based hosting services and licensed software arrangements.

Professional fees increased primarily due to costs incurred in preparation for the acquisition of CGS.

Amortization of intangible assets increased primarily due to a continued investment in capitalized internal-use software, with more assets placed in service.

EMEA operating income increased 7.0% to $86.6 million during the six months ended February 28, 2022, compared with $80.9 million in the same period a year ago.

The increase in EMEA operating income was primarily due to growth in revenues of 8.7%, partially offset by an increase in employee compensation expense and data costs.

Employee compensation expense increased mainly due to the impact of a one-time restructuring charge to drive organizational realignment and higher annual base salaries.

Royalty fees increased due to contracts acquired in connection with the acquisition of CGS.

EMEA operating income increased 14.2% to $139.8 million during the nine months ended May 31, 2022, compared with $122.4 million in the same period a year ago.

The increase in EMEA operating income was primarily due to growth in revenues of 12.5%, a decrease in bad debt expense and amortization of intangible assets, partially offset by an impairment of long-lived assets, higher employee compensation expense and data costs.

Amortization of intangible assets decreased as certain acquired intangible assets were fully amortized during the third quarter of fiscal 2022.

The impairment charges related mainly to our lease ROU assets and PPE associated with vacating certain leased office space.

Employee compensation expense increased mainly due to the impact of a one-time restructuring charge to drive organizational realignment.

Data costs increased primarily due to a non-recurring charge for certain data content.

Asia Pacific operating income increased 18.9% to $55.0 million during the six months ended February 28, 2022, compared with $46.3 million in the same period a year ago.

Asia Pacific operating income increased 24.2% to $87.8 million during the nine months ended May 31, 2022, compared with $70.7 million in the same period a year ago.

The increase in Asia Pacific operating income was mainly due to growth in revenues of 18.2%, partially offset by an increase in employee compensation expense.

Employee compensation expense increased mainly due to higher annual base salaries, a net increase in employee headcount of 351 and increased variable compensation.

Employee compensation expense increased mainly due to higher annual base salaries, inclusive of a net increase in employee headcount of 132, and increased variable compensation.

Income Taxes, Net Income and Diluted Earnings per Share

Three Months Ended Six Months Ended

February 28, % Change February 28, % Change

(in thousands, except for per share data) 2022 2021 2022 2021

The provision for income taxes is as follows:

Three Months Ended Nine Months Ended

May 31, May 31,

(in thousands) 2022 2021 2022 2021

Income before income taxes $ 85,280 $ 114,276 $ 327,166 $ 349,174

Provision for income taxes $ 10,370 $ 13,597 $ 34,671 $ 50,646

Net income $ 109,938 $ 96,643 13.8 % $ 217,585 $ 197,849 10.0 %

Diluted earnings per common share $ 2.84 $ 2.50 13.6 % $ 5.63 $ 5.12 10.0 %

Effective tax rate 12.2 % 11.9 % 10.6 % 14.5 %

Our effective tax rate is lower than the applicable U.S.

corporate income tax rate for the three and six months ended February 28, 2022, driven mainly by research and development ("R&D") tax credits and a foreign derived intangible income ("FDII") deduction.

Our effective tax rate for the three and six months ended February 28, 2022 is further reduced by windfall tax benefits associated with the employee exercise of stock options.

Three months ended February 28, 2022 compared with three months ended February 28, 2021

For the three months ended February 28, 2022, the provision for income taxes was $12.0 million, compared with $18.0 million for the same period a year ago.

The provision decreased mainly due to lower projected levels of income before income taxes, a lower effective tax rate compared to the prior year period and a $4.2 million in higher windfall tax benefits from stock-based compensation, partially offset by higher income before income taxes for the three months ended February 28, 2022, compared with the prior year period.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

For the six months ended February 28, 2022, the provision for income taxes was $24.3 million, compared with $37.0 million for the same period a year ago.

The provision decreased mainly due to lower projected levels of income before income taxes, a lower effective tax rate compared to the prior year period and $11.2 million in higher windfall tax benefit from stock-based compensation, partially offset by higher income before income taxes during the six months ended February 28, 2022, compared with the prior year period.

corporate income tax rate for the three and nine months ended May 31, 2022, driven mainly by research and development ("R&D") tax credits and a foreign derived intangible income ("FDII") deduction.

Our effective tax rate for the three and nine months ended May 31, 2022 is further reduced by windfall tax benefits associated with the employee exercise of stock options.

Three months ended May 31, 2022 compared with three months ended May 31, 2021

For the three months ended May 31, 2022, the provision for income taxes was $10.4 million, compared with $13.6 million for the same period a year ago.

The provision decreased mainly due to lower pretax income for the three months ended May 31, 2022, compared with the prior year period.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

For the nine months ended May 31, 2022, the provision for income taxes was $34.7 million, compared with $50.6 million for the same period a year ago.

The provision decreased mainly due to lower pretax income and $12.0 million in higher windfall tax benefit from stock-based compensation for the nine months ended May 31, 2022, compared with the prior year period.

Net Income and Diluted Earnings per Share

Three months ended February 28, 2022 compared with three months ended February 28, 2021

Net income increased 13.8% to $109.9 million and diluted earnings per share ("EPS") increased 13.6% to $2.84 for the three months ended February 28, 2022, compared with the same period a year ago.

Net income and diluted EPS increased primarily due to increased operating income and a reduction in the provision for income taxes.

Six months ended February 28, 2022 compared with six months ended February 28, 2021

Net income increased 10.0% to $217.6 million and diluted EPS increased 10.0% to $5.63 for the six months ended February 28, 2022, compared with the same period a year ago.

Net income and diluted EPS increased primarily due to a decrease in the provision for income taxes and increased operating income.

Three Months Ended Nine Months Ended

May 31, % Change May 31, % Change

(in thousands, except for per share data) 2022 2021 2022 2021

Net income $ 74,910 $ 100,679 (25.6) % $ 292,495 $ 298,528 (2.0) %

Diluted earnings per common share $ 1.93 $ 2.62 (26.3) % $ 7.58 $ 7.73 (1.9) %

Diluted weighted average common shares 38,720 38,488 0.6 % 38,607 38,602 — %

Three months ended May 31, 2022 compared with three months ended May 31, 2021

Net income decreased 25.6% to $74.9 million and diluted earnings per share ("EPS") decreased 26.3% to $1.93 for the three months ended May 31, 2022, compared with the same period a year ago.

Net income and diluted EPS decreased primarily due to lower operating income mainly due to impairment charges related to vacating certain leased office space and higher interest expense related to our debt refinancing, partially offset by a reduction in the provision for income taxes.

EPS also decreased due to an increase in our diluted weighted average shares outstanding compared to the same period a year ago.

Nine months ended May 31, 2022 compared with nine months ended May 31, 2021

Net income decreased 2.0% to $292.5 million and diluted EPS decreased 1.9% to $7.58 for the nine months ended May 31, 2022, compared with the same period a year ago.

Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States ("GAAP"), we use non-GAAP financial measures including organic revenue, adjusted operating income, adjusted operating margin, adjusted net income, EBITDA, adjusted EBITDA and adjusted diluted EPS.

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States ("GAAP"), we use non-GAAP financial measures including organic revenues, adjusted operating income, adjusted operating margin, adjusted net income, EBITDA, adjusted EBITDA and adjusted diluted EPS.

The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are show in the tables below.

6 unchanged sentences

Three Months Ended

February 28, % Change

May 31, % Change

(In thousands) 2022 2021

17 unchanged sentences

Business acquisition costs 12,408 —

Transformation costs (1)

Restructuring / severance 1,079 —

Transformation costs (1)

Adjusted operating income $ 179,066 $ 126,465 41.6 %

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Business acquisition costs 10,827 —

Transformation costs (1)

Restructuring / severance 941 —

Transformation costs (1)

Income tax items

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Depreciation and amortization expense 27,349 17,223

$ 137,024 $ 132,153 3.7 %

Non-recurring non-cash expenses (4)

EBITDA $ 124,680 $ 133,338 (6.5) %

Real estate charges (4)

Adjusted EBITDA $ 173,477 $ 133,338 30.1 %

$ 146,758 $ 132,153 11.1 %

Diluted earnings per common share $ 1.93 $ 2.62 (26.3) %

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Business acquisition costs 0.28 —

Transformation costs (1)

Restructuring / severance 0.02 —

Transformation costs (1)

Income tax items

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(1) Costs primarily related to professional fees associated with the ongoing multi-year investment plan.

(2) Adjusted operating margin is calculated as adjusted operating income divided by adjusted revenues as shown in the organic revenues table above.

(2) Adjusted operating margin is calculated as Adjusted operating income divided by Adjusted revenues as shown in the revenues reconciliation table above.

(3) For purposes of calculating Adjusted net income and Adjusted diluted earnings per share, Intangible asset amortization, Deferred revenues fair value adjustments and other items were taxed at the quarterly effective tax rates of 12.7% for fiscal 2022 and 17.3% for fiscal 2021.

(4) Costs related to impairment charges of our lease ROU assets and Property, equipment and leasehold improvements associated with vacating certain leased office space.

(4) Costs related to impairment charges of our lease ROU assets and PPE associated with vacating certain leased office space.

Liquidity and Capital Resources

Our primary sources of liquidity have been our cash flows generated from our operations, existing cash and cash equivalents and, when needed, our credit capacity under our existing credit facility.

We use these sources of liquidity to, among other things, service our existing and future debt obligations, satisfy our working capital requirements and fund our capital expenditures, investments, acquisitions, dividend payments and repurchases of our common stock.

Based on past performance and current expectations, we believe our liquidity, along with other financing alternatives, will provide us the necessary capital to fund these transactions and achieve our planned growth for the next 12 months and the foreseeable future.

Our cash flows provided by operating activities, existing cash and cash equivalents, supplemented with our long-term debt borrowings, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our operations.

Generally, some or all of the remaining available cash flow has been used to among other things, service our existing and future debt obligations, satisfy our working capital requirements and fund our capital expenditures, investments, acquisitions, dividend payments and repurchases of our common stock.

Based on past performance and current expectations, we believe our sources of liquidity, including the available capacity under our existing revolving credit facility and other financing alternatives, will provide us the necessary capital to fund these transactions and achieve our planned growth for the next 12 months and the foreseeable future.

Sources of Liquidity

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2022 Credit Agreement

On March 29, 2019, we entered into a credit agreement with PNC Bank, National Association ("PNC") (the "2019 Credit Agreement"), which provides for a $750.0 million revolving credit facility (the "2019 Revolving Credit Facility").

The 2019 Revolving Credit Facility allows for borrowings until its maturity date of March 29, 2024.

The 2019 Credit Agreement also allows for, subject to certain requirements, additional borrowings with PNC for an aggregate amount up to $500.0 million, provided that any such request for additional borrowings must be in a minimum amount of $25.0 million.

As of February 28, 2022, we have borrowed $575.0 million of the available $750.0 million provided by the 2019 Revolving Credit Facility, resulting in $175.0 million available to be withdrawn.

We are required to pay a commitment fee using a pricing grid which was 0.10% as of February 28, 2022.

This fee is based on the daily amount by which the available balance in the 2019 Revolving Credit Facility exceeds the borrowed amount.

All outstanding loan amounts are reported as Long-term debt within the Consolidated Balance Sheets at February 28, 2022 and August 31, 2021.

The principal balance is payable in full on the maturity date.

Borrowings under the loan bear interest on the outstanding principal amount at a rate equal to LIBOR plus a spread using a debt leverage pricing grid, which was 0.875% as of February 28, 2022.

The variable rate of interest on the 2019 Revolving Credit Facility creates exposure to interest rate volatility due to changes in LIBOR.

To mitigate this exposure, on March 5, 2020, we entered into an interest rate swap agreement with a notional amount of $287.5 million to hedge the variable interest rate obligation on a portion of our outstanding balance under the 2019 Revolving Credit Facility.

Under the terms of the interest rate swap agreement, we pay interest at a fixed rate of 0.7995% and receive variable interest payments based on the same one-month LIBOR utilized to calculate the interest expense from the 2019 Revolving Credit Facility.

The interest rate swap agreement matures on March 29, 2024.

Including the effects of the interest rate swap agreement, the weighted average interest rate on amounts outstanding under our 2019 Revolving Credit Facility was 1.36% and 1.38% for the six months ended February 28, 2022 and fiscal year ended August 31, 2021, respectively.

Interest on the outstanding balance under the 2019 Revolving Credit Facility is payable quarterly, in arrears, and on the maturity date.

The 2019 Credit Agreement contains covenants and requirements restricting certain of our activities, which are usual and customary for this type of loan.

In addition, the 2019 Credit Agreement requires that we maintain a consolidated net leverage ratio, as measured by total net funded debt/EBITDA (as defined in the 2019 Credit Agreement), below a specified level as of the end of each fiscal quarter.

We were in compliance with all the covenants and requirements within the 2019 Credit Agreement as of February 28, 2022.

As of March 1, 2022 , we repaid in full and terminated our 2019 Credit Agreement .

Refer to Note 17, Subsequent Events for more information on the termination.

On March 1, 2022, we entered into a credit agreement (the "2022 Credit Agreement") which provides for a senior unsecured term loan credit facility in an aggregate principal amount of $1.0 billion (the “2022 Term Facility”) and a senior unsecured revolving credit facility in an aggregate principal amount of $500.0 million (the “2022 Revolving Facility” and, together with the 2022 Term Facility, the “2022 Credit Facilities”).

The 2022 Term Facility matures on March 1, 2025, and the 2022 Revolving Facility matures on March 1, 2027.

The 2022 Revolving Facility allows for the availability of up to $100.0 million in the form of letters of credit and up to $50.0 million in the form of swingline loans.

We may seek additional commitments under the 2022 Revolving Facility from lenders or other financial institutions up to an aggregate principal amount of $750.0 million.

On March 1, 2022, we borrowed $1.0 billion under the 2022 Term Facility and $250.0 million of the available $500.0 million under the 2022 Revolving Facility.

We are required to pay a commitment fee on the daily unused amount of the 2022 Revolving Facility using a pricing grid which was 0.125% as of May 31, 2022 and can fluctuate between 0.10% per annum and 0.25% per annum.

We used these borrowings, along with the net proceeds from the issuance of the Senior Notes (as defined below) and cash on hand, to finance the consideration for the CGS acquisition, to repay borrowings under the 2019 Credit Agreement and to pay related transaction fees, costs and expenses.

During the third quarter of 2022, we incurred approximately $9.5 million in debt issuance costs related to the 2022 Credit Facilities.

We defer costs we incur to issue debt, which are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the related debt liability, and we amortize these costs to Interest expense, net in the Consolidated Statements of Income over the contractual term on a straight-line basis, which approximates the effective interest method.

Loans under the 2022 Term Facility are subject to scheduled amortization payments on the last day of each fiscal quarter, commencing with August 31, 2022 and ending on the last such day to occur prior to the maturity date.

Each amortization payment is equal to 1.25% of the original principal amount of the 2022 Term Facility.

Any remaining outstanding principal will be repaid in full on March 1, 2025, the maturity date of the 2022 Term Facility.

The 2022 Credit Facilities are not otherwise subject to any mandatory prepayments.

We may voluntarily prepay loans under the 2022 Credit Facilities at any time without premium or penalty.

Prepayments of the 2022 Term Facility shall be applied to reduce the subsequent scheduled amortization payments in direct order of maturity.

During the third quarter of fiscal 2022, we repaid $125.0 million under the 2022 Term Facility.

The 2022 Credit Agreement provides that loans denominated in U.S.

dollars, at our option, will bear interest at either (i) one-month Term SOFR (with a 10 basis points credit spread adjustment and subject to a “zero” floor), (ii) Daily Simple SOFR (with a 10 basis points credit spread adjustment and subject to a “zero” floor) or (iii) an alternate base rate.

Under the 2022 Credit Agreement, loans denominated in Pounds Sterling will bear interest at Daily Simple SONIA (subject to a “zero” floor) and

loans denominated in Euros will bear interest at EURIBOR (subject to a “zero” floor), in each case, plus an applicable interest rate margin.

The interest rate margin will be based upon our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio.

The outstanding borrowings under the 2022 Term Facility through the third quarter of fiscal 2022 bore interest at a rate equal to the applicable Term SOFR rate plus a spread using a debt leverage pricing grid currently at 1.1%.

The 2022 Credit Agreement contains usual and customary event of default provisions for facilities of this type, which are subject to usual and customary grace periods and materiality thresholds.

If an event of default occurs under the 2022 Credit Agreement, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings immediately due and payable.

Refer to Note 12, Debt for further discussion of the 2022 Credit Agreement.

On March 1, 2022 we completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due March 1, 2027 (the “2027 Notes”) and $500.0 million aggregate principal amount of 3.450% Senior Notes due March 1, 2032 (the “2032 Notes” and, together with the 2027 Notes, the “Senior Notes”).

The Senior Notes were issued pursuant to an indenture, dated as of March 1, 2022, by and between us and U.S.

Bank Trust Company, National Association, as trustee (the "Trustee"), as supplemented by the supplemental indenture, dated as of March 1, 2022, between us and the Trustee (the "Supplemental Indenture").

The Senior Notes were issued at an aggregate discount of $2.8 million, and during the third quarter of 2022, we incurred approximately $9.1 million in debt issuance costs related to the Senior Notes.

We deferred the debt discounts and costs we incurred to issue debt, which are presented in the Consolidated Balance Sheets as a net direct deduction from the carrying amount of the related debt liability, and we amortize these costs to Interest expense, net in the Consolidated Statements of Income over the contractual term leveraging the effective interest method.

The 2027 Notes and the 2032 Notes will mature on March 1, 2027 and March 1, 2032, respectively.

Interest on the Senior Notes is payable semiannually in arrears on March 1 and September 1 of each year, beginning September 1, 2022.

We may redeem the Senior Notes, in whole or in part, at any time at specified redemption prices, plus accrued and unpaid interest, if any.

The Senior Notes are unsecured unsubordinated obligations and will be effectively subordinated to any of our existing and future secured obligations to the extent of the value of the assets securing such obligations.

Upon the occurrence of a change of control triggering event (as defined in the Supplemental Indenture), we must offer to repurchase the Senior Notes at 101% of their principal amount, plus accrued and unpaid interest, if any.

2022 Swap Agreement

On March 1, 2022, we entered into the 2022 Swap Agreement to hedge a portion of our outstanding floating SOFR rate debt with a fixed interest rate of 1.162%.

Refer to Note 6, Derivative Instruments , for defined terms and more information on the 2022 Swap Agreement.

2019 Credit Agreement

On March 1, 2022, FactSet Research Systems Inc.

entered into the 2022 Credit Agreement and concurrently we repaid in full and terminated the 2019 Credit Agreement.

On March 1, 2022, we borrowed $1.0 billion under the 2022 Term Facility, and $250.0 million under the 2022 Revolving Facility.

Refer to Note 17, Subsequent Events for definition of these terms and more information on the 2022 Credit Agreement.

On March 1, 2022, FactSet Research Systems Inc.

completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due 2027 and $500.0 million aggregate principal amount of 3.450% Senior Notes due 2032.

Refer to Note 17, Subsequent Events for more information on the Senior Notes.

On March 29, 2019, we entered into a credit agreement with PNC Bank, National Association ("PNC") (the "2019 Credit Agreement"), which provided for a $750.0 million revolving credit facility (the "2019 Revolving Credit Facility").

The 2019 Revolving Credit Facility allowed for borrowings until its maturity date of March 29, 2024.

The 2019 Credit Agreement also allowed for, subject to certain requirements, additional borrowings with PNC for an aggregate amount up to $500.0 million, provided that any such request for additional borrowings must be in a minimum amount of $25.0 million.

We borrowed $575.0 million of the available $750.0 million provided by the 2019 Revolving Credit Facility, resulting in $175.0 million that was available to be borrowed.

We were required to pay a commitment fee using a pricing grid based on the daily amount by which the available balance in the 2019 Revolving Credit Facility exceeded the borrowed amount.

All outstanding loan amounts were reported as Long-term debt within the Consolidated Balance Sheets.

Borrowings under the 2019 Revolving Credit Facility bore interest on the outstanding principal amount at a rate equal to the daily LIBOR plus a spread using a debt leverage pricing grid.

Interest on the amounts outstanding under the 2019 Revolving Credit Facility was payable quarterly, in arrears, and on the maturity date.

During fiscal 2019, we incurred approximately $0.9 million in debt issuance costs related to the 2019 Credit Agreement.

These costs were capitalized as debt issuance costs and were amortized into Interest expense, net in the Consolidated Statements of Income ratably over the term of the 2019 Credit Agreement.

The 2019 Credit Agreement contained covenants and requirements restricting certain of our activities, which were usual and customary for this type of loan.

In addition, the 2019 Credit Agreement required that we maintain a consolidated net leverage ratio, as measured by total net funded debt/EBITDA (as defined in the 2019 Credit Agreement), below a specified level as of t he end of each fiscal quarter.

As of March 1, 2022, we repaid in full and terminated the 2019 Credit Agreement.

Refer to Note 12, Debt for more information on the termination.

Uses of Liquidity

Returning Value to Shareholders

For the six months ended February 28, 2022, we returned $80.1 million to stockholders in the form of share repurchases and dividends.

For the nine months ended May 31, 2022, we returned $111.0 million to stockholders in the form of share repurchases and dividends.

Over the last 12 months, we returned $234.2 million to stockholders in the form of share repurchases and dividends.

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Under our share repurchase program, we may repurchase shares of our common stock from time to time in the open market and privately negotiated transactions, subject to market conditions.

Beginning in the second quarter of fiscal 2022, we suspended our share repurchase program through at least the second half of fiscal 2023, with the exception of potential minor repurchases to offset dilution from grants of equity awards or repurchases to satisfy withholding tax obligations du e upon the vesting of stock-based awards.

The suspension of our share repurchase program allows us to prioritize the repayment of debt under the 2022 Credit Agreement.

Refer to Note 17, Subsequent Events for more information on the 2022 Credit Agreement.

As such, for the three months ended February 28, 2022, we did not make any repurchases under our existing share repurchase program, compared to 221,959 shares repurchased for $71.5 million for the three months ended February 28, 2021.

During the six months ended February 28, 2022, we repurchased 46,200 shares for $18.6 million under our existing share repurchase program compared with 353,759 shares for $114.6 million in the same period a year ago.

As of February 28, 2022, $181.3 million remained available under the share repurchase program for future share repurchases.

The suspension of our share repurchase program allows us to prioritize the repayment of debt of the 2022 Credit Facilities.

Refer to Note 12, Debt for more information on the 2022 Credit Facilities.

As such, for the three months ended May 31, 2022, we did not make any repurchases under our existing share repurchase program, compared to 178,100 shares repurchased for $57.6 million for the three months ended May 31, 2021.

During the nine months ended May 31, 2022, we repurchased 46,200 shares for $18.6 million under our existing share repurchase program, compared with 531,859 shares for $172.2 million in the same period a year ago.

As of May 31, 2022, $181.3 million remained available under the share repurchase program for future share repurchases.

There is no defined number of shares to be repurchased over a specified timeframe through the life of the share repurchase program.

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Capital Expenditures

For the six months ended February 28, 2022, capital expenditures were $20.5 million, compared with $28.8 million during the same period a year ago, a decrease of $8.2 million.

Capital expenditures decreased primarily due to costs incurred for the build-out of our office space in the Philippines during the six months ended February 28, 2021, without a similar expenditure during the six months ended February 28, 2022.

On February 2, 2022, our Board of Directors approved a regular quarterly dividend of $0.82 per share.

Dividends of $31.1 million were paid on March 17, 2022 to common stockholders of record at the close of business on February 28, 2022.

For the nine months ended May 31, 2022, capital expenditures were $36.0 million, compared with $47.4 million during the same period a year ago, a decrease of $11.6 million.

Capital expenditures decreased primarily due to costs incurred for the build-out of our office space in the Philippines during the nine months ended May 31, 2021, partially offset by higher expenditures related to the development of capitalized internal-use software and peripherals for office space primarily in India during the nine months ended May 31, 2022.

On April 28, 2022, our Board of Directors approved a regular quarterly dividend of $0.89 per share.

The increase of $0.07 per share, or 8.5%, in the amount of our quarterly dividend marked the 23rd consecutive year we have increased dividends, highlighting our continued commitment to returning value to our shareholders.

Dividends of $33.8 million were paid on June 16, 2022 to common stockholders of record at the close of business on May 31, 2022.

Future cash dividends will depend on our earnings, capital requirements, financial condition and other factors considered relevant by us and are subject to final determination by our Board of Directors.

During fiscal 2022 and 2021, we completed acquisitions of several businesses, with the most significant cash flows related to the acquisitions of Cobalt Software, Inc.

During fiscal 2022 and 2021, we completed acquisitions of several businesses, with the most significant cash flows related to the acquisitions of CGS, Cobalt Software, Inc.

("Cobalt") and Truvalue Labs, Inc.

On March 1, 2022, we completed the acquisition of CGS.

On March 1, 2022, we completed the acquisition of CGS, previously operated by S&P Global Inc.

on behalf of the American Bankers Association, for a cash purchase price of $1.932 billion, inclusive of preliminary working capital adjustments.

CGS manages a database of 60 different data elements uniquely identifying more than 50 million global financial instruments.

CGS is the exclusive provider of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers globally and also acts as the official numbering agency for International Securities Identification Number ("ISIN") identifiers in the United States and as a substitute number agency for more than 35 other countries.

We anticipate that the CGS acquisition will significantly expand our critical role in the global capital markets.

On October 12, 2021, we acquired all of the outstanding shares of Cobalt for a purchase price of $50.0 million, net of cash acquired.

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The acquisition of TVL further enhances our commitment to providing industry leading access to ESG data across our platforms.

Refer to Note 7, Acquisition, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of the Cobalt and TVL acquisitions.

Refer to Note 17, Subsequent Events, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on our March 1, 2022 acquisition of CGS.

Refer to Note 7, Acquisitions , for further discussion of the CGS, Cobalt and TVL acquisitions.

Contractual Obligations

Purchase obligations represent committed payments due in future periods to our various data vendors and for other goods and services.

These purchase commitments are agreements that are enforceable and legally binding on us, and they specify all significant terms, including:

fixed or minimum quantities to be purchased;

fixed, minimum or variable price provisions;

and the approximate timing of the transaction.

The effect of our contractual obligations on our liquidity and capital resources in future periods should be considered in conjunction with the factors mentioned here.

Purchase obligations represent our legally-binding agreements to purchase fixed or minimum quantities at determinable prices.

Our purchase obligations consist of two primary arrangements, data content and hosting services.

We also have contractual obligations related to our lease liabilities and outstanding debt.

The effect of our contractual obligations on our liquidity and capital resources in future periods should incorporate the information described in Note 14, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in Part II, Item 8 in our Annual Report on Form 10-K for fiscal year ended August 31, 2021, in conjunction with the factors mentioned here.

As of August 31, 2021, we had total purchase commitments of $191.9 million.

During the second quarter of fiscal 2022, we entered into a software subscription agreement with total purchase commitments of approximately $10 million with a contract term of three years.

We also have contractual obligations related to our lease liabilities and outstanding debt.

During the third quarter of fiscal 2022, we entered into a cloud hosting contract with a total purchase commitments of approximately $$275.0 million with a contract term of six years.

This cloud hosting contract replaced a previous contract which was included in the August 31, 2021 balance with a minimum purchase commitment of $125.0 million.

Refer to Note 11, Leases and Note 12, Debt for information regarding lease commitments and outstanding debt obligations, respectively.

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The table below, for the periods indicated, provides selected cash flow information:

Six Months Ended

Nine Months Ended

(in thousands) 2022 2021 $ Change % Change

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Net cash used in investing activities (2,018,269) (88,404) (1,929,865) 2183.0 %

Net cash used by financing activities (26,417) (146,659) 120,242 (82.0) %

Net cash provided by/(used in) financing activities 1,488,556 (214,758) 1,703,314 (793.1) %

Effect of exchange rate changes on cash and cash equivalents (12,110) 5,648 (17,758) (314.4) %

Net increase in cash and cash equivalents $ 91,147 $ 17,079 $ 74,068 433.7 %

Cash and cash equivalents aggregated to $773.0 million as of February 28, 2022, compared with $681.9 million as of August 31, 2021.

Our cash and cash equivalents increased $91.1 million during the six months ended February 28, 2022, primarily due to cash provided by operating activities of $195.0 million and proceeds from the exercise of employee stock options of $56.9 million, partially offset by cash outflows from dividend payments of $61.4 million, acquisition of a business of $50.0 million, capital expenditures of $20.5 million and share repurchases of $18.6 million.

Our cash and cash equivalents are held in numerous locations throughout the world, with $493.9 million within the Americas, $215.4 million within EMEA (predominantly within the UK and France) and the remaining $63.7 million within Asia Pacific (predominantly within the Philippines and India) as of February 28, 2022.

We intend to reinvest substantially all of our accumulated undistributed foreign earnings, except in instances where repatriation would result in minimal additional tax.

For the six months ended February 28, 2022, net cash provided by operating activities was $195.0 million compared with $229.9 million during the same period a year ago, a decrease of $35.0 million.

This decrease was primarily driven by the timing

of both tax payments in certain jurisdictions and collections of accounts receivable, as well as higher bonus payments, partially offset by higher net income.

Net cash used in investing activities was $70.8 million for the six months ended February 28, 2022, representing a $1.1 million increase from the same period a year ago.

This increase was driven by higher spend on acquisitions, with a $50.0 million cash purchase price for Cobalt, net of cash acquired, during the six months ended February 28, 2022, compared with a $41.9 million cash purchase price for TVL, net of cash acquired, in the prior year period.

The increase in net cash used in investing was further impacted by a reduction of $1.2 million in net proceeds from investments (net of purchases) during the six months ended February 28, 2022 compared to the prior year period, partially offset by a decrease in capital expenditures of $8.2 million for the six months ended February 28, 2022 compared with the prior year period.

Net cash used in financing activities was $26.4 million for the six months ended February 28, 2022, representing a $120.2 million favorable change compared with the same period a year ago.

This cash flow improvement was mainly driven by a $96.0 million decrease in share repurchases and a $28.4 million increase in proceeds from employee stock plans, partially offset by an increase of $3.3 million in dividend payments.

Net (decrease) increase in cash and cash equivalents $ (154,899) $ 72,735 $ (154,899) (313.0) %

For the nine months ended May 31, 2022, net cash provided by operating activities was $386.9 million, compared with $370.2 million provided during the same period a year ago, an increase of $16.7 million.

This increase was primarily driven by increased collections of accounts receivable and the timing of tax payments in certain jurisdictions, partially offset by higher payments related to variable compensation and lower net income.

For the nine months ended May 31, 2022, net cash used in investing activities was $2,018.3 million, compared with $88.4 million used during the same period a year ago, an increase of $1,929.9 million.

This increase was primarily driven by higher spend on acquisitions, including the $1,932.3 million cash purchase price of CGS, inclusive of preliminary working capital adjustments, and the $50.0 million cash purchase price for Cobalt, net of cash acquired, during the nine months ended May 31, 2022, compared with the $41.9 million cash purchase price for TVL, net of cash acquired, in the prior year period.

The increase in net cash used in investing was partially offset by a decrease in capital expenditures of $11.6 million for the nine months ended May 31, 2022 compared with the prior year period.

For the nine months ended May 31, 2022, net cash inflow in financing activities was $1,488.6 million, compared with an outflow of $214.8 million during the same period a year ago, a $1,703.3 million favorable change.

This cash flow improvement was mainly driven by the $2,238.4 million proceeds received from the 2022 Credit Facilities and Senior Notes, a $153.6 million reduction in repurchases of common stock and a $27.2 million increase in proceeds from employee stock plans, partially offset by the repayment of $700.0 million of debt related to the termination of the 2019 Credit Agreement and partial prepayment of the 2022 Term Facility.

Free Cash Flow

We define free cash flow, a non-GAAP financial measure, as cash provided by operating activities less purchases of property, equipment, leasehold improvements and capitalized internal-use software.

We present free cash flow solely as a supplemental disclosure to provide useful information to investors about the amount of cash generated by the business after necessary capital expenditures.

We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after necessary capital expenditures.

We believe free cash flow is a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures, can be used for strategic opportunities, including returning value to shareholders, investing in our business, making strategic acquisitions, and strengthening the balance sheet.

Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.

The following table reconciles our net cash provided by operating activities to free cash flow:

Six Months Ended

Nine Months Ended

(in thousands) 2022 2021 Change

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(1) Capital expenditures are included in net cash used in investing activities during each fiscal period reported and include property, equipment, leasehold improvements and capitalized internal-use software.

Free cash flow generated during the six months ended February 28, 2022 was $174.4 million compared with $201.2 million during the same period a year ago, reflecting a 13.3% decrease.

This $26.8 million decrease was due to a $35.0 million decrease in operating cash flows, partially offset by an $8.2 million decrease in capital expenditures.

Free cash flow generated during the nine months ended May 31, 2022 was $351.0 million compared with $322.8 million during the same period a year ago, reflecting a 8.7% increase.

This $28.1 million increase was comprised of a $16.7 million increase in operating cash flows and an $11.6 million decrease in capital expenditures.

The operating cash flows increase was primarily driven by increased collections of accounts receivable and the timing of tax payments in certain jurisdictions, partially offset by higher payments related to variable compensation and lower net income.

The capital expenditures decrease was primarily due to costs incurred for the build-out of our office space in the Philippines during the nine months ended May 31, 2021, partially offset by higher expenditures related to the development of capitalized internal-use software and peripherals for office space primarily in India during the nine months ended May 31, 2022.

Off-Balance Sheet Arrangements

At February 28, 2022 and August 31, 2021, we had no off-balance sheet financing or other arrangements with unconsolidated entities or financial partnerships (such as entities often referred to as structured finance or special purpose entities) established for purposes of facilitating off-balance sheet financing, other debt arrangements, or other contractually limited purposes.

At May 31, 2022 and August 31, 2021, we had no off-balance sheet financing or other arrangements with unconsolidated entities or financial partnerships (such as entities often referred to as structured finance or special purpose entities) established for purposes of facilitating off-balance sheet financing, other debt arrangements, or other contractually limited purposes.

Foreign Currency

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dollars at average exchange rates prevailing during the period and the assets and liabilities translated at the rates of exchange on the balance sheet date.

The net translation gains and losses are recorded in accumulated other comprehensive loss as a component of stockholders’ equity.

During the three months ended February 28, 2022, foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $1.2 million, compared with a decrease of $1.4 million to operating income a year ago.

During the six months ended February 28, 2022, foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $5.4 million, compared with a $0.8 million a decrease to operating income a year ago.

To mitigate the foreign currency exposure, we entered into a series of forward contracts to hedge a portion of our British Pound Sterling, Euro, Indian Rupee, and Philippine Peso exposures ranging from 25% to 50% over their respective hedged periods as of February 28, 2022.

The current foreign currency forward contracts are set to mature at various points between the third quarter of fiscal 2022 through the first quarter of fiscal 2023.

As of February 28, 2022, the gross notional value of foreign currency forward contracts to purchase Philippine Pesos and Indian Rupees with U.S.

The net foreign currency translation adjustments are recorded in accumulated other comprehensive loss as a component of stockholders’ equity.

During the three months ended May 31, 2022, foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $1.3 million, compared with a decrease of $0.6 million to operating income a year ago.

During the nine months ended May 31, 2022, foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $6.7 million, compared with a $1.4 million decrease to operating income a year ago.

To mitigate the foreign currency exposure, we entered into a series of forward contracts to hedge a portion of our exposures primarily related to the British Pound Sterling, Indian Rupee, Euro, and Philippine Peso ranging from 25% to 75%, as of May 31, 2022, over their respective hedged periods.

The current foreign currency forward contracts are set to mature at various points between the fourth quarter of fiscal 2022 through the third quarter of fiscal 2023.

As of May 31, 2022, the gross notional value of foreign currency forward contracts to purchase Philippine Pesos and Indian Rupees with U.S.

dollars was ₱1.4 billion and Rs2.6 billion, respectively.

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dollars was €37.4 million and £41.2 million, respectively.

A loss on foreign currency forward contracts of $1.0 million was recorded into operating income for the three months ended February 28, 2022, compared with a gain on forward currency forward contracts of $2.1 million in the same period a year ago.

For the six months ended February 28, 2022, a loss on forward currency forward contracts of $1.5 million was recorded into operating income, compared with a gain on forward currency forward contracts of $2.9 million in the prior year period.

A loss on foreign currency forward contracts of $2.6 million was recorded into operating income for the three months ended May 31, 2022, compared with a gain on forward currency forward contracts of $1.7 million in the same period a year ago.

For the nine months ended May 31, 2022, a loss on forward currency forward contracts of $4.1 million was recorded into operating income, compared with a gain on forward currency forward contracts of $4.6 million in the prior year period.

Critical Accounting Policies and Estimates

We prepare the Consolidated Financial Statements in conformity with GAAP, which requires us to make certain estimates and apply judgements that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures.

We base our estimates on historical experience and other assumptions that we believe to be reasonable at the time the Consolidated Financial Statements are prepared and, as such, they may ultimately differ materially from actual results.

We describe our significant accounting policies in Note 3, Summary of Significant Accounting Policies , of the notes to our Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended August 31, 2021.

The accounting policies used in preparing our Consolidated Financial Statements for the six months ended February 28, 2022 are applied consistently with those described in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021.

our estimates on historical experience and other assumptions that we believe to be reasonable at the time the Consolidated Financial Statements are prepared and, as such, they may ultimately differ materially from actual results.

We describe our significant accounting policies in Note 3, Summary of Significant Accounting Policies , of the Notes to the Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended August 31, 2021.

These accounting policies were consistently applied in preparing our Consolidated Financial Statements for the three and nine months ended May 31, 2022.

We discuss our critical accounting estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021.

There were no significant changes in our critical accounting estimates during the six months ended February 28, 2022.

There were no significant changes in our critical accounting estimates during the three and nine months ended May 31, 2022.

New Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis