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Item 7. Management’s Discussion and Analysis

2025-10-22 compared with 2024-10-29 · 235 added, 240 removed, 333 unchanged (59% of the section changed)

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Executive Overview

FactSet Research Systems Inc.

and its wholly-owned subsidiaries (collectively, "we," "our," "us," the "Company" or "FactSet") is a global financial digital platform and enterprise solutions provider with open and flexible technologies that aims to supercharge financial intelligence.

Our platform delivers expansive data, sophisticated analytics, and flexible technology used by global financial professionals to power their critical investment workflows.

As of August 31, 2024, we had more than 8,200 clients comprised of over 216,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, partners, hedge funds, corporate users, and private equity and venture capital professionals.

FactSet is a global financial digital platform and enterprise solutions provider with open and flexible technologies that deliver financial intelligence to investment professionals worldwide.

Our platform delivers expansive data, sophisticated analytics, and flexible, AI-powered technologies used by global financial professionals to power their critical investment workflows.

As of August 31, 2025, we had approximately 9,000 clients comprised of over 237,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, partners, hedge funds, corporate users, and private equity and venture capital professionals.

Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected data and technology platform.

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We also offer managed services that operate as an extension of our clients' internal teams to support data, performance, risk and reporting workflows.

We drive our business based on detailed understanding of our clients’ workflows, which helps us to solve their most complex challenges.

We drive our business based on a detailed understanding of our clients’ workflows, which helps us to solve their most complex challenges.

We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas and analyze, monitor and manage their portfolios.

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

We provide open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions, and application programming interfaces ("APIs").

The CUSIP Global Services ("CGS") business supports security master files relied on by the investment industry for critical front, middle and back-office functions.

We provide open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions, and APIs.

AI is embedded across these offerings to enhance data discovery, automate routine workflows and improve the speed and accuracy of client insights.

The CGS business supports security master files relied on by the investment industry for critical front, middle and back-office functions.

All of our platforms and solutions are supported by our dedicated client service team.

We operate our business through three reportable segments ("segments"):

We operate our business through three segments:

the Americas, EMEA and Asia Pacific.

During fiscal 2024, we revised our internal organization within each segment to offer data, products and analytical applications by firm type:

Within each segment, we offer data, products and analytical applications by firm type:

Institutional Buyside, Dealmakers, Wealth, and Partnerships and CGS.

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Revenues for fiscal 2025 were $2,321.7 million, an increase of 5.4% from the comparable prior year.

The growth in revenues was reflective of organic revenues growth of 5.7% during fiscal 2024, compared with the prior year.

The growth in revenues was driven by a 4.4% increase in organic revenues, a 0.9% increase from acquisition-related revenues and a net increase of 0.1% from foreign currency exchange rate fluctuations.

Revenues increased in all our segments, primarily in the Americas.

Revenues increased due to higher demand and price increases primarily from workstations, data solutions and middle office solutions.

Revenues increased primarily from workstations and to a lesser extent, CGS and front office solutions.

Refer to Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations, Non-GAAP Financial Measures, of this Annual Report on Form 10-K for a definition of organic revenues and a reconciliation between revenues and organic revenues.

As of August 31, 2024, organic annual subscription value ("Organic ASV") plus Professional Services totaled $2,272.8 million, an increase of 4.8% over the prior year.

As of August 31, 2025, organic annual subscription value ("Organic ASV") totaled $2,370.9 million, an increase of 5.7% over the prior year.

Organic ASV increased in all our segments, with the majority of the increase in the Americas.

Organic ASV growth was driven by higher demand and price increases primarily from workstations and, to a lesser extent, CGS subscriptions, middle office solutions and data solutions.

Organic ASV growth was mainly driven by workstations, data solutions and, to a lesser extent, CGS.

Refer to Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations, Annual Subscription Value, of this Annual Report on Form 10-K for the definitions of Organic ASV and Organic ASV plus Professional Services.

Operating margin increased to 31.8% for fiscal 2024, compared with 30.2% for fiscal 2023.

This increase was primarily due to growth in revenues and, when expressed as a percentage of revenues, a decrease in employee compensation costs and lower asset impairment charges, partially offset by charges related to a Massachusetts sales tax dispute ("Sales Tax Dispute") and an increase in amortization of intangible assets.

Management's Discussion and Analysis of Financial Condition and Results of Operations, Annual Subscription Value, of this Annual Report on Form 10-K for the definition of Organic ASV.

Operating margin was 32.2% for fiscal 2025, compared with 31.8% for fiscal 2024.

This increase in operating margin was mainly due to growth in revenues and, when expressed as a percentage of revenues, charges related to the Sales Tax Dispute that were recorded in the prior year, partially offset by higher amortization of intangible assets in the current year.

Refer to Part II, Item 8.

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Diluted earnings per common share ("Diluted EPS") for fiscal 2025 was $15.55, an increase of 11.8% compared with the prior year.

The increase in Net income and Diluted EPS was primarily driven by higher operating income.

Diluted EPS further increased as a result of lower diluted weighted average common shares outstanding compared with the prior year.

The increase in Net income and Diluted EPS was primarily driven by higher operating income and a gain from the divestiture of a business.

We returned $460.4 million to our stockholders in the form of share repurchases and dividends during fiscal 2025.

As of August 31, 2024, our client and user count was 8,217 and 216,381, respectively.

As of August 31, 2025, our client and user counts were 8,996 and 237,324, respectively.

Our employee headcount was 12,800 as of August 31, 2025, up 3.2% compared to the prior year.

This increase was driven by net headcount growth in Asia Pacific of 3.7%, while the Americas and EMEA experienced a net headcount decrease of 4.8% and 2.0%, respectively.

CUSIP Global Services Acquisition

On March 1, 2022, we completed our acquisition of CGS for a cash price of $1.932 billion, inclusive of working capital adjustments.

We acquired CGS to expand our critical role in the global capital markets.

Revenues from CGS are recognized based on geographic business activities in accordance with how our segments are currently aligned.

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 Part II, Item 8.

Note 6, Acquisitions and Note 12, Debt in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for more information on these defined terms as well as our acquisition of CGS, the Senior Notes and the 2022 Credit Facilities, respectively.

This increase was driven by net headcount growth of 6.0% in the Americas and 2.6% in each of EMEA and Asia Pacific.

Annual Subscription Value ("ASV")

We believe ASV reflects our ability to grow recurring revenues and generate positive cash flows, and thus serves as a key indicator of the successful execution of our business strategy.

– "ASV" at any point in time represents our forward-looking revenues for the next 12 months from all subscription services currently being supplied to clients, excluding revenues from Professional Services.

– ASV at any point in time represents our forward-looking revenues for the next 12 months from all subscription services currently being supplied to clients.

– Organic ASV at any point in time equals our ASV excluding ASV from acquisitions and dispositions completed within the last 12 months and the effects of foreign currency movements.

– "Professional Services" are revenues derived from project-based consulting and implementation services, annualized over the past 12 months.

– "Organic ASV plus Professional Services" at any point in time equals the sum of Organic ASV and Professional Services.

Organic ASV plus Professional Services

The following table presents the calculation of Organic ASV plus Professional Services as of August 31, 2024.

Beginning in fiscal 2025, we are reporting Organic ASV, rather than Organic ASV plus professional services, to focus on the recurring nature of our revenues.

This underscores the shift of our offerings toward providing more managed services and less project-based services.

The following table presents the calculation of Organic ASV as of August 31, 2025.

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

(dollar amounts in millions)

As of August 31, 2024

As reported ASV plus Professional Services (1)

Currency impact (2)

Organic ASV plus Professional Services $ 2,272.8

Organic ASV plus Professional Services annual growth rate 4.8 %

(1) Includes $18.3 million in Professional Services as of August 31, 2024.

(2) The impact from foreign currency movements.

As of August 31, 2024, Organic ASV plus Professional Services was $2,272.8 million, an increase of 4.8% compared with August 31, 2023.

Organic ASV increased in all our segments, with the majority of the increase related to the Americas.

This increase in Organic ASV was primarily driven by higher sales to existing clients and, to a lesser extent, price increases to existing clients and sales to new clients, partially offset by existing client cancellations.

These higher sales and price increases were primarily attributable to workstations and, to a lesser extent, CGS subscriptions, middle office solutions and data solutions.

(dollar amounts in millions) As of August 31, 2025

Impact from foreign currency movements

Acquisition ASV (1 )

Organic ASV annual growth rate (2)

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

(2) For comparability purposes, in calculating the organic ASV annual growth rate, the prior year excludes ASV from dispositions completed in the last 12 months.

As of August 31, 2025, Organic ASV was $2,370.9 million, an increase of 5.7% compared with August 31, 2024.

Organic ASV increased in all our segments, with the majority of the increase in the Americas.

The increase in Organic ASV was primarily due to higher sales to existing clients and, to a lesser extent, sales to new clients and price increases to existing clients, all primarily attributable to workstations, data solutions and, to a lesser extent, CGS.

This increase was partially offset by existing client cancellations.

As of August 31, 2025, ASV from the Americas represented 65% of total ASV and was $1,570.1 million, an increase from $1,455.4 million as of August 31, 2024.

Americas Organic ASV was $1,541.9 million as of August 31, 2025, a 6.0% increase from the prior year.

The Organic ASV increase in the Americas was driven by higher demand and price increases primarily from workstations and, to a lesser extent, CGS subscriptions.

The Organic ASV increase in the Americas was primarily driven by workstations and, to a lesser extent, data solutions.

As of August 31, 2025, ASV from EMEA represented 25% of total ASV and was $591.6 million, an increase from $569.7 million as of August 31, 2024.

EMEA Organic ASV was $586.3 million as of August 31, 2025, a 4.2% increase from the prior year.

The EMEA Organic ASV increase was driven by higher demand and price increases mainly from middle office solutions and data solutions.

The EMEA Organic ASV increase was mainly from data solutions.

As of August 31, 2025, ASV from Asia Pacific represented 10% of total ASV and was $243.9 million, an increase from $230.3 million as of August 31, 2024.

Asia Pacific Organic ASV was $242.7 million as of August 31, 2025, a 7.2% increase from the prior year.

The Asia Pacific Organic ASV increase was driven by higher demand and price increases primarily from data solutions, workstations and middle office solutions.

The Asia Pacific Organic ASV increase was primarily driven by data solutions and workstations.

Buy-side and Sell-side Organic ASV Growth

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Buy-side clients account for approximately 82% of our Organic ASV, consistent with the prior year, and primarily include institutional asset managers, wealth managers, asset owners, partners, hedge funds and corporate clients.

The remainder of our

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

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

Client and User Additions

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8,996 8,217 9.5 %

Users 216,381 189,972 13.9 %

237,324 216,381 9.7 %

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

Our total client count was 8,217 as of August 31, 2024, a net increase of 3.7% or 296 clients in the last twelve months, mainly due to an increase in corporate clients and wealth management clients.

As of August 31, 2024, there were 216,381 professionals using FactSet, representing a net increase of 13.9% or 26,409 users in the last twelve months, primarily driven by an increase in wealth users.

Annual ASV retention was greater than 95% of ASV for the year ended August 31, 2024 and August 31, 2023.

When expressed as a percentage of clients, annual retention was approximately 90% for the year ended August 31, 2024, compared with approximately 91% for the year ended August 31, 2023.

(2) The user count does not reflect users associated with our fiscal 2025 acquisitions.

Our total client count was 8,996 as of August 31, 2025, a net increase of 9.5% or 779 clients in the last 12 months, mainly due to an increase in corporate clients, primarily driven by clients from the Platform Group Limited ("Irwin") acquisition.

As of August 31, 2025, there were 237,324 professionals using FactSet, representing a net increase of 9.7% or 20,943 users in the last twelve months, primarily driven by an increase in wealth management users.

The user count does not reflect our fiscal 2025 acquisitions.

Annual ASV retention was greater than 95% of ASV as of August 31, 2025 and August 31, 2024.

When expressed as a percentage of clients, annual retention was 91% as of August 31, 2025, compared with 90% as of August 31, 2024.

Employee Headcount

As of August 31, 2025, our net employee headcount increased by 3.2% to 12,800, compared with 12,398 employees as of August 31, 2024.

This net headcount growth was primarily due to our continued investment in our centers of excellence ("COEs"), primarily located in India and the Philippines, which accounted for approximately 69% of our employees.

As of August 31, 2024, compared to August 31, 2023, our net headcount growth in Asia Pacific was 3.7%, while the Americas and EMEA experienced a net headcount decrease of 4.8% and 2.0%, respectively.

This net headcount increase was primarily in the technology and sales groups mainly driven by continued investment in our COEs, through an increase in employees based in the Philippines and India, and our Irwin and Liquid Holdings, LLC ("LiquidityBook") acquisitions.

As of August 31, 2025, compared to August 31, 2024, our net headcount growth was 6.0% in the Americas and 2.6% in each of EMEA and Asia Pacific.

As of August 31, 2025, we had 8,854 employees located in Asia Pacific, 2,510 in the Americas and 1,436 in EMEA.

Approximately 68% of our employees are located in our COEs.

Results of Operations

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Selling, general and administrative 475,663 489,812 (2.9) %

Asset impairments 4,677 25,946 (82.0) %

Operating income $ 748,303 $ 701,299 6.7 %

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Revenues in fiscal 2025 were $2,321.7 million, an increase of 5.4%.

This growth in revenues was primarily reflective of organic revenues growth of 5.7%, with organic revenues increasing to $2,203.7 million for fiscal 2024.

This 5.4% growth in revenues was driven by a 4.4% increase in organic revenues which totaled $2,300.2 million for fiscal 2025, a 0.9% increase from acquisition-related revenues and a net increase of 0.1% from foreign currency exchange rate fluctuations.

Revenues increased in all our geographic segments, primarily in the Americas.

The increase in revenues was mainly due to increased sales to existing clients and, to a lesser extent, price increases to existing clients and sales to new clients, partially offset by existing client cancellations.

Revenues increased due to higher demand and price increases primarily from workstations, data solutions and middle office solutions.

The increase in revenues was mainly from workstations and, to a lesser extent, CGS and front office solutions.

Revenues by Segment

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Revenues from the Americas increased 6.1% to $1,506.1 million in fiscal 2025, compared with $1,419.9 million in fiscal 2024.

This growth in revenues was reflective of organic revenues growth of 6.3%.

The increase in revenues was driven by higher demand and price increases primarily from workstations and, to a lesser extent, CGS subscriptions.

This 6.1% growth in revenues was driven by a 4.9% increase in organic revenues and a 1.2% increase from acquisition-related revenues.

The increase in revenues was mainly driven by workstations and, to a lesser extent, front office solutions.

Revenues from EMEA increased 3.0% to $580.3 million in fiscal 2025, compared with $563.2 million in fiscal 2024.

This growth in revenues of 4.3% was reflective of a 4.1% increase in organic revenues and a net increase of 0.2% due to foreign currency exchange rate fluctuations.

The increase in revenues was driven by higher demand and price increases primarily from data solutions and middle office solutions.

This 3.0% growth in revenues was driven by a 2.5% increase in organic revenues, a 0.4% increase from acquisition-related revenues and a 0.1% net increase from foreign currency exchange rate fluctuations.

The increase in revenues was primarily from data solutions and middle office solutions.

Revenues from Asia Pacific increased 7.0% to $235.3 million in fiscal 2025, compared with $220.0 million in fiscal 2024.

This growth in revenues of 4.7% was reflective of a 5.7% increase in organic revenues, partially offset by a net decrease of 1.0% due to foreign currency exchange rate fluctuations.

The increase in revenues was driven by higher demand and price increases primarily from workstations, data solutions and middle office solutions.

This 7.0% was driven by a 6.3% increase in organic revenues, a 0.5% increase from acquisition-related revenues and a 0.2% net increase from foreign currency exchange rate fluctuations.

The increase in revenues was mainly driven by data solutions, workstations and, to a lesser extent, front office solutions.

Operating Expenses

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Cost of services is mainly comprised of employee compensation costs and also includes expenses related to data costs, computer-related expenses, amortization of intangible assets, royalty fees, telecommunication costs and computer depreciation.

Selling, general and administrative (" SG&A") consists primarily of employee compensation costs and also includes expenses related to occupancy costs, professional fees, depreciation of furniture and fixtures, amortization of leasehold improvements, travel and entertainment expenses, marketing costs, other employee-related expenses, internal communication costs and bad debt expense.

Employee compensation costs are a major component of both our Cost of services and SG&A.

These expenses primarily include costs related to salaries, incentive compensation and sales commissions, stock-based compensation, benefits, employment taxes, and any applicable restructuring costs.

These expenses primarily include costs related to salaries, incentive compensation and sales commissions, stock-based compensation, benefits, employment taxes and restructuring costs.

We assign employee compensation costs between Cost of services and SG&A based on the roles and activities associated with each employee.

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Employees included in our sales department and those that serve in various other support departments, including marketing, finance, legal, human resources and administrative services, are classified as SG&A.

Asset impairments consist primarily of expenses recognized when the carrying value of an asset exceeds its fair value.

The following table summarizes the components of our total operating expenses and operating margin:

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SG&A 475,663 489,812 (2.9) %

Asset impairments 4,677 25,946 (82.0) %

Total operating expenses $ 1,573,445 $ 1,501,757 4.8 %

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Cost of Services

Cost of services increased 4.0% to $1,011.9 million in fiscal 2024, compared with $973.2 million in fiscal 2023, primarily due to an increase in amortization of intangible assets and computer-related expenses.

Cost of services, when expressed as a percentage of revenues, was 45.9% for fiscal 2024, a decrease of 70 basis points compared with fiscal 2023.

This decrease was primarily driven by a decrease in employee compensation costs, partially offset by higher amortization of intangible assets and computer-related expenses.

• Employee compensation costs decreased 180 basis points primarily due to a decrease in restructuring charges and variable compensation costs, partially offset by an increase in annual base salaries, net of capitalization of certain compensation costs.

The increase in annual base salaries was primarily driven by annual merit increases and a net headcount increase in Cost of services of 166, primarily located in our COEs, partially offset by higher capitalization of compensation costs related to the development of our internal-use software.

• Amortization of intangible assets increased 60 basis points mainly due to higher amortization from capitalized costs related to the development of our internal-use software.

• Computer-related expenses increased 30 basis points primarily due to higher spend related to licensed software arrangements and cloud-based hosting services.

Cost of services increased 8.5% to $1,097.8 million in fiscal 2025, compared with $1,011.9 million in fiscal 2024, primarily due to an increase in amortization of intangible assets, employee compensation costs and computer-related expenses.

Cost of services, when expressed as a percentage of revenues, was 47.3% for fiscal 2025, an increase of 130 basis points compared with fiscal 2024.

This increase was primarily from higher amortization of intangible assets, mainly driven by a 100 basis point increase in amortization from our capitalized internal-use software development costs.

Selling, General and Administrative

SG&A expenses increased 6.1% to $485.1 million during fiscal 2024, compared with $457.1 million in fiscal 2023, primarily due to charges related to the Sales Tax Dispute, partially offset by a decrease in employee compensation costs.

SG&A expenses, when expressed as a percentage of revenues, were 22.0% for fiscal 2024, an increase of 10 basis points compared with fiscal 2023.

This increase was primarily due to charges related to the Sales Tax Dispute, partially offset by a decrease in employee compensation costs.

• The charges related to the Sales Tax Dispute increased SG&A by 220 basis points.

SG&A expenses decreased 2.9% to $475.7 million during fiscal 2025, compared with $489.8 million in fiscal 2024.

The decrease was primarily attributable to charges related to the Sales Tax Dispute recorded in the prior year, partially offset by higher employee compensation costs and professional fees in the current year.

SG&A expenses, when expressed as a percentage of revenues, were 20.5% for fiscal 2025, a decrease of 170 basis points compared with fiscal 2024.

This decrease was primarily due to charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher employee compensation costs and professional fees in the current year.

When expressed as a percentage of revenues:

• The charges related to the Sales Tax Dispute recorded in the prior year decreased SG&A by 240 basis points.

Refer to Part II, Item 8.

Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K for more information on the Sales Tax Dispute.

• Employee compensation costs decreased 170 basis points primarily due to a decrease in variable compensation costs and restructuring charges.

Asset Impairments

Asset impairments were $4.7 million during fiscal 2024, compared with $25.9 million during fiscal 2023.

The asset impairments were the result of a $3.4 million and $18.0 million charge during fiscal 2024 and 2023, respectively, related to our

lease right-of-use ("ROU") assets and property, equipment and leasehold improvements ("PPE") associated with vacating certain leased office space to rightsize our real estate footprint.

As there were no expected future cash flows from the lease ROU assets for locations we will not sublease, nor for PPE linked to the vacated leased office space, we concluded that these assets hold no remaining fair value and were fully impaired.

For those locations we anticipated subleasing, we estimated the fair value of the lease ROU assets as of the cease use date, using a market approach, based on expected future cash flows from sublease income.

The remaining asset impairments for fiscal 2024 and 2023 were $1.3 million related to Developed technology and $7.9 million related to Developed technology and Trade names, respectively.

• Employee compensation costs increased by 80 basis points, mainly due to higher variable compensation costs driven by a lower bonus accrual during fiscal 2024.

• Professional fees increased by 60 basis points, mainly due to acquisition-related costs.

Operating Income and Operating Margin

Operating income increased 6.7% to $748.3 million in fiscal 2025, compared with $701.3 million in fiscal 2024.

This increase was primarily due to growth in revenues, lower employee compensation costs and a decrease in asset impairment charges, partially offset by charges related to the Sales Tax Dispute.

Foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $3.1 million during fiscal 2024 compared with fiscal 2023.

This increase was primarily driven by growth in revenues and charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher employee compensation costs and amortization of intangible assets in the current year.

Operating margin increased to 32.2% in fiscal 2025, compared with 31.8% in the prior year.

This increase was primarily due to growth in revenues and, when expressed as a percentage of revenue, a decrease in employee compensation costs and lower asset impairment charges, partially offset by charges related to the Sales Tax Dispute and an increase in amortization of intangible assets.

This increase was primarily driven by growth in revenues and, when expressed as a percentage of revenues, charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher amortization of intangible assets in the current year.

Operating Income by Segment

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Americas operating income increased 16.9% to $306.0 million during fiscal 2025, compared with $261.8 million from the prior year.

This increase was primarily due to growth in revenues of 6.3% and lower employee compensation costs, partially offset by charges related to the Sales Tax Dispute.

• Employee compensation costs decreased primarily due to lower variable compensation and a decrease in annual base salaries mainly driven by higher capitalization of compensation costs related to the development of our internal-use software.

• The charge related to the Sales Tax Dispute is discussed in Part II, Item 8.

This increase was primarily due to growth in revenues of 6.1% and charges associated with the Sales Tax Dispute recorded in the prior year, partially offset by higher amortization of intangible assets and employee compensation costs in the current year.

• The charge related to the Sales Tax Dispute in the prior year is discussed in Part II, Item 8.

Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K.

EMEA operating income increased 16.4% to $283.0 million during fiscal 2024, compared with $243.0 million from the prior year.

This increase was primarily due to growth in revenues of 4.3%, a decrease in asset impairment charges and lower employee compensation costs, partially offset by higher data costs.

• Asset impairment charges decreased primarily due to lower lease ROU asset and PPE impairment charges associated with vacating certain leased office space during fiscal 2024, compared with fiscal 2023.

• Employee compensation costs decreased primarily due to lower restructuring charges, partially offset by an increase in annual base salaries.

The increase in annual base salaries was mainly driven by annual merit increases, partially offset by a net headcount decrease of 29 employees.

• Data costs increased as the prior year included the release of certain accruals related to the successful resolution of exchange audits that reduced the prior year data costs.

• Amortization of intangible assets increased mainly due to higher amortization from our capitalized internal-use software development costs.

• Employee compensation costs increased primarily due to higher variable compensation costs driven by a lower bonus accrual during fiscal 2024.

EMEA operating income decreased 3.2% to $274.0 million during fiscal 2025, compared with $283.0 million from the prior year.

This decrease was primarily due to higher employee compensation costs, partially offset by growth in revenues of 3.0%.

Employee compensation costs increased primarily due to higher annual base salaries, driven by an increase in annual merit and net headcount growth of 37 employees, and, to a lesser extent, variable compensation costs mainly due to a lower bonus accrual during fiscal 2024.

Asia Pacific operating income increased 7.5% to $168.3 million during fiscal 2025, compared with $156.5 million from the prior year.

This increase was mainly due to growth in revenues of 4.7% and a reduction in certain operating expenses, partially offset by higher employee compensation costs.

Employee compensation costs increased primarily due to higher annual base salaries driven by annual merit increases and a net headcount increase of 310 employees.

This increase was mainly due to growth in revenues of 7.0%, partially offset by higher employee compensation costs.

Employee compensation costs increased primarily due to higher annual base salaries, driven by annual merit increases and a net headcount increase of 222 employees, and higher variable compensation costs mainly due to a lower bonus accrual during fiscal 2024.

The provision for income taxes and the effective tax rate are as follows:

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Effective tax rate 17.2 % 17.6 % (2.1) %

We are subject to taxation in the United States ("U.S.") and various foreign jurisdictions in which we conduct our business.

Our effective tax rate is based on recurring factors and non-recurring events, including the taxation of foreign income.

Our effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as other non-recurring events.

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

corporate income tax rate for fiscal 2024 driven mainly by the utilization of foreign tax credits, research and development ("R&D") tax credits, a tax benefit from the exercise of stock options and a foreign derived intangible income ("FDII") deduction, partially offset by our net state taxes.

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

corporate income tax rate for fiscal 2023 driven mainly by R&D tax credits, a tax benefit from the exercise of stock options and a FDII deduction, partially offset by a one-time out-of-period adjustment related to a review and analysis of certain tax positions, as well as our net state taxes.

We are subject to taxation in the U.S.

and various state, local and foreign jurisdictions in which we conduct our business.

Our effective tax rate will vary based on, among other factors, changes in levels of foreign income, as well as other non-recurring events.

Our effective tax rate for fiscal 2025 was 17.2% compared with 17.6% for fiscal 2024.

This decrease was primarily due to the increased utilization of foreign tax credits and a prior year out-of-period adjustment related to a review and analysis of certain tax positions.

The adjustment related to the accounting of tax balance sheet accounts.

This decrease was primarily due to a lower U.S.

tax impact of foreign earnings.

All local, federal and foreign taxes payable were paid in a timely manner, subject to normal audits of open years.

The decrease in the effective tax rate was partially offset by higher pretax income, which reduced the effective tax rate impact of certain tax benefits.

For the periods presented, our effective tax rates were lower than the applicable U.S.

corporate income tax rate.

This was primarily attributable to excess tax benefits from stock-based compensation, a lower U.S.

tax impact of foreign earnings, research and development ("R&D") tax credits and a foreign derived intangible income ("FDII") tax deduction, partially offset by our state income taxes.

Net Income and Diluted EPS

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Diluted EPS $ 15.55 $ 13.91 11.8 %

The increase in Net income and Diluted EPS for fiscal 2024, compared with fiscal 2023, was primarily driven by higher operating income.

Diluted EPS further increased as a result of lower diluted weighted average common shares outstanding.

The increase in Net income and Diluted EPS for fiscal 2025, compared with fiscal 2024, was primarily driven by higher operating income and a gain from the divestiture of a business.

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 revenues, adjusted operating income, adjusted operating margin, adjusted net income, EBITDA, adjusted EBITDA and adjusted Diluted EPS.

The reconciliations from our financial measures calculated and presented in accordance with GAAP to these non-GAAP financial measures are shown in the tables below.

Reconciliations from our financial measures calculated and presented in accordance with GAAP to these non-GAAP financial measures are shown in the tables below, and the reconciliation of free cash flow is included in the Liquidity and Capital Resources section.

These non-GAAP financial measures should not be considered in isolation from, as a substitute for, or superior to, financial measures reported in accordance with GAAP.

Moreover, these non-GAAP financial measures have limitations in that

they do not reflect all the items associated with the operations of our business as determined in accordance with GAAP.

Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of our business as determined in accordance with GAAP.

Other companies may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

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Adjusted measures may also facilitate comparisons to our historical performance.

Organic revenues exclude the current year impact of revenues from acquisitions and dispositions completed within the past twelve months ("Acquisition revenues" and "Disposition revenues", respectively) and the current year impact from changes in foreign currency.

Organic revenues excludes the current year impact of revenues from acquisitions and dispositions completed within the past 12 months ("Acquisition revenues" and "Disposition revenues", respectively) and the current year impact from changes in foreign currency.

In addition, for our year to date comparisons, organic revenues also excludes current year revenues that were incurred prior to the first anniversary date of an acquisition.

The table below provides an unaudited reconciliation of revenues to organic revenues:

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Adjusted operating income and margin, adjusted net income, and adjusted Diluted EPS exclude the impact of acquisition-related intangible asset amortization and non-recurring items.

EBITDA and adjusted EBITDA represent earnings before interest expense, provision for income taxes and depreciation and amortization, while adjusted EBITDA further excludes non-recurring non-cash expenses.

EBITDA represents earnings before interest expense, provision for income taxes and depreciation and amortization, while adjusted EBITDA further excludes non-recurring non-cash expenses.

Years ended August 31,

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Intangible asset amortization 73,036 67,383

Business divestiture, acquisitions and related costs

Sales Tax Dispute (1)

Executive search costs 1,675 —

Restructuring/severance

Asset impairment

Business acquisition / integration costs (2)

Adjusted operating income $ 843,432 $ 832,653 1.3 %

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Intangible asset amortization 54,074 49,529

Gain on business divestiture (17,205) —

Business divestiture, acquisitions and related costs

Sales Tax Dispute (1)

Executive search costs

Restructuring/severance

Asset impairment — 2,531

Business acquisition / integration costs (2)

Income tax items 1,351 1,397

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Intangible asset amortization 1.41 1.27

Gain on business divestiture (0.45) —

Business divestiture, acquisitions and related costs

Sales Tax Dispute (1)

Executive search costs

Restructuring/severance

Asset impairment — 0.07

Business acquisition / integration costs (2)

Income tax items 0.04 0.04

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Weighted average common shares (diluted) 38,385 38,618

(1) The asset impairment primarily relates to impairment charges of lease ROU assets and PPE associated with rightsizing our real estate footprint.

(2) Fiscal 2024 related to certain business acquisition costs and fiscal 2023 related to integration costs from the CGS acquisition.

(1) Related to a resolved matter with the Massachusetts Department of Revenue.

Refer to Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in Part II, Item 8.

of this Annual Report on Form 10-K, for further discussion on this matter.

(2) Adjusted operating margin is calculated as Adjusted operating income divided by Revenues.

(3) For purposes of calculating Adjusted net income and Adjusted Diluted EPS, all adjustments were taxed at an adjusted tax rate of 26.0% and 26.5% for fiscal 2025 and fiscal 2024, respectively.

(5) Primarily related to asset impairments.

Liquidity and Capital Resources

As of August 31, 2024, Cash and cash equivalents were $423.0 million, compared with $425.4 million as of August 31, 2023.

Our cash and cash equivalents are held in numerous locations throughout the world, with $160.2 million in the Americas, $157.6 million in EMEA (predominantly in the UK) and the remaining $105.2 million in Asia Pacific (predominantly in the Philippines and India) as of August 31, 2024 .

As of August 31, 2024 , we have $306.6 million of undistributed foreign earnings of which $87.7 million are permanently reinvested.

It is not practicable to determine the deferred tax liability that would be payable if these permanently reinvested earnings were repatriated to the U.S.

As of August 31, 2024, we have recorded a deferred tax liability of $3.6 million, which represents the future tax consequences that are expected upon the ultimate repatriation of earnings that are not permanently reinvested.

As of August 31, 2025, Cash and cash equivalents were $337.7 million and restricted cash was $14.0 million, compared with Cash and cash equivalents of $423.0 million as of August 31, 2024.

Refer to Summary of Cash Flows within this section below, for more information on cash flows during fiscal 2025 and 2024.

Our Cash and cash equivalents as of August 31, 2025 are held in numerous locations throughout the world, with $169.8 million in EMEA (with the largest balance held in the UK), $106.1 million in the Americas and the remaining $61.8 million in Asia Pacific (with the largest balance held in the Philippines).

As of August 31, 2025 , we had $486.9 million of undistributed foreign earnings of which $69.1 million are permanently reinvested.

It is our intent to permanently reinvest all foreign undistributed earnings, except in jurisdictions where earnings can be repatriated substantially free of tax.

It is not practicable to determine the deferred tax liability that would be payable if these earnings were repatriated to the U.S.

Our cash flows provided by operating activities, existing cash and cash equivalents, supplemented with our 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 our remaining available cash flows have been used to, among other things, service our existing and future debt obligations, satisfy our working capital requirements and fund various activities, including our capital expenditures, acquisitions, investments, 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 twelve months and the foreseeable future.

We are exposed to credit risk for our cash and cash equivalents held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits;

however, we do not believe our concentration of cash and cash equivalents presents a significant credit risk as the counterparties to the instruments consist of multiple high-quality, credit-worthy financial institutions.

We are exposed to credit risk for our cash, cash equivalents and restricted cash held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits;

however, we do not believe our concentration of cash, cash equivalents and restricted cash presents a significant credit risk as the counterparties to the instruments consist of multiple high-quality, credit-worthy financial institutions.

Sources of Liquidity

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2025 Credit Agreement

On March 1, 2022, we entered into a credit agreement (the "2022 Credit Agreement") and borrowed an aggregate principal amount of $1.0 billion under its senior unsecured term loan credit facility (the "2022 Term Facility") and $250.0 million of the available $500.0 million under its senior unsecured revolving credit facility (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 of up to $750.0 million under the 2022 Revolving Facility from lenders or other financial institutions.

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 prior outstanding borrowings and to pay related transaction fees, costs and expenses.

On April 8, 2025, we entered into a credit agreement (the "2025 Credit Agreement") and borrowed $500.0 million under a senior unsecured term loan credit facility (the "2025 Term Facility").

We used the proceeds from the 2025 Term Facility borrowing to repay the outstanding balance under the 2022 Revolving Facility (as defined below).

The 2025 Credit Agreement also provides for a $1.0 billion senior unsecured revolving credit facility (the "2025 Revolving Facility").

The 2025 Revolving Facility, together with the 2025 Term Facility, are referred to as the "2025 Credit Facilities".

The 2025 Term Facility matures on April 8, 2028, and the 2025 Revolving Facility matures on April 8, 2030.

The 2025 Revolving Facility provides for up to $100.0 million in the form of letters of credit and up to $100.0 million in the form of swingline loans.

We may seek additional commitments of up to $1.0 billion under the 2025 Revolving Facility from lenders or other financial institutions.

The 2025 Term Facility is subject to scheduled quarterly principal payments, commencing on August 31, 2025, with each quarterly principal payment equal to 1.25% of the original principal amount of the 2025 Term Facility.

The 2025 Credit Facilities are not otherwise subject to any other mandatory repayments.

We may voluntarily prepay loans under the 2025 Credit Facilities at any time without premium or penalty.

During fiscal 2024, we repaid $250.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $200.0 million.

Since loan inception on March 1, 2022, we have repaid $875.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $762.5 million.

As of August 31, 2024, we had short-term liquidity requirements of $125.0 million related to the outstanding balance of the 2022 Term Facility which becomes due March 1, 2025.

From the borrowing date through November 30, 2023, the outstanding borrowings under the 2022 Credit Facilities bore interest at a rate equal to the applicable one-month Term Secured Overnight Financing Rate ("SOFR") plus a 1.1% spread (comprised of a 1.0% interest rate margin based on a debt leverage pricing grid plus a 0.1% credit spread adjustment).

From December 1, 2023 through August 31, 2024, the spread decreased to 0.975% (comprised of a 0.875% interest rate margin based on a debt leverage pricing grid plus a 0.1% credit spread adjustment).

Interest on the 2022 Credit Facilities is currently payable on the last business day of each month, in arrears.

Additionally, we pay a commitment fee on the daily unused amount of the 2022 Revolving Facility using a pricing grid based on our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio.

From the borrowing date through November 30, 2023, the commitment fee was 0.125%, which subsequently decreased to 0.1% through August 31, 2024.

Prepayments of the 2025 Term Facility shall be applied to reduce the subsequent scheduled quarterly principal payments in direct order of maturity.

During fiscal 2025, we repaid $125.0 million under the 2025 Term Facility.

This included $68.8 million to satisfy all scheduled quarterly principal payments from loan inception through maturity, eliminating any future mandatory quarterly principal payment requirements.

The remaining $56.2 million was made as a voluntary prepayment.

From the effective date of the 2025 Revolving Facility through August 31, 2025, we have had no borrowings under the 2025 Revolving Facility.

From the borrowing date through August 31, 2025, the outstanding borrowings under the 2025 Credit Facilities bore interest at a rate equal to the applicable one-month Term Secured Overnight Financing Rate ("SOFR") plus a 0.975% spread (comprised of a 0.875% interest rate margin, based on a pricing grid determined by reference to our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio, plus a 0.1% credit spread adjustment).

We pay a commitment fee on the daily unused amount of the 2025 Revolving Facility using a pricing grid based on our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio.

The commitment fee remained consistent at 0.1% through August 31, 2025.

Debt issuance costs related to the 2025 Credit Facilities were $3.4 million.

These debt issuance costs are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability for the 2025 Term Facility and within Other assets for the 2025 Revolving Facility.

Debt issuance costs are amortized to Interest expense in the Consolidated Statements of Income on a straight-line basis over the contractual term of the debt (which approximates the effective interest method for the 2025 Term Facility).

The 2025 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 2025 Credit Agreement, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings immediately due and payable.

The 2022 Credit Agreement contains usual and customary affirmative and negative covenants for facilities of this type, including a financial covenant requiring maintenance of a total leverage ratio of no greater than 3.50 to 1.00 as of August 31, 2024.

The 2025 Credit Agreement contains usual and customary affirmative and negative covenants for facilities of this type, including a financial covenant requiring maintenance of a total leverage ratio of no greater than 3.75 to 1.00 as of the last day of each fiscal quarter (subject to an increase to 4.25 to 1.00 for five consecutive fiscal quarters in connection with certain material acquisitions).

We were in compliance with all covenants and requirements of the 2025 Credit Agreement as of August 31, 2025.

Refer to Part II, Item 8.

Note 12, Debt, in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion of the 2022 Credit Agreement.

2022 Credit Agreement

On March 1, 2022, we entered into a credit agreement (the "2022 Credit Agreement") and borrowed $1.0 billion under a senior unsecured term loan credit facility (the "2022 Term Facility") and $250.0 million of the available $500.0 million under a senior unsecured revolving credit facility (the "2022 Revolving Facility").

The 2022 Revolving Facility, together with the 2022 Term Facility, are referred to as the "2022 Credit Facilities".

On January 31, 2025, we entered into a joinder agreement to our 2022 Credit Agreement pursuant to which commitments under the 2022 Revolving Facility were increased by $100.0 million, to a total of $600.0 million.

All other terms of the 2022 Credit Agreement remained unchanged.

The 2022 Term Facility, originally due to mature on March 1, 2025, was repaid in full following $125.0 million of repayments made during the six months ended February 28, 2025.

During fiscal 2025, we borrowed $305.0 million and repaid $555.0 million under the 2022 Revolving Facility.

The 2022 Credit Agreement was terminated on April 8, 2025, concurrent with entering into the 2025 Credit Agreement.

Borrowings previously outstanding under the 2022 Credit Facilities bore interest at a rate equal to the applicable one-month Term SOFR plus a spread, using a debt leverage pricing grid and a credit spread adjustment (with total spread ranging from 0.975% to 1.1% over the term of the debt).

Interest Rate Swap Agreements

We leverage interest rate swap agreements to manage our floating interest rate exposure with a fixed interest rate.

Our interest rate swap agreements are designated as cash flow hedges at inception.

2025 Swap Agreement

On March 1, 2024, we entered into an interest rate swap agreement ("2024 Swap Agreement") to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 5.145%.

Refer to Part II, Item 8.

Note 5, Derivative Instruments , in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K, for more information on the 2024 Swap Agreement.

On April 24, 2025, we entered into an interest rate swap agreement ("2025 Swap Agreement") with a notional amount of $200.0 million to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 4.086%.

The notional amount of the 2025 Swap Agreement declines by $50.0 million on a quarterly basis beginning May 31, 2025 and matures on February 28, 2026.

As of August 31, 2025, the notional amount of the 2025 Swap Agreement was $100.0 million.

2024 Swap Agreement

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

On March 1, 2024, we entered into an interest rate swap agreement ("2024 Swap Agreement") with a notional amount of $200.0 million to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 5.145%.

The notional amount of the 2024 Swap Agreement declined by $50.0 million on a quarterly basis beginning May 31, 2024.

The 2024 Swap Agreement matured on February 28, 2025.

Refer to Part II, Item 8.

Note 5, Derivative Instruments, in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K, for more information on the 2022 Swap 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").

2022 Swap Agreement

On March 1, 2022, we entered into an interest rate swap agreement ("2022 Swap Agreement") with a notional amount of $800.0 million to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 1.162%.

The notional amount of the 2022 Swap Agreement declined by $100.0 million on a quarterly basis beginning May 31, 2022.

The 2022 Swap Agreement matured on February 28, 2024.

Refer to Part II, Item 7A.

Quantitative and Qualitative Disclosures About Market Risk , in this Annual Report on Form 10-K, for further discussion of our exposure to interest rate risk on our outstanding floating rate debt.

On March 1, 2022, we completed a public offering issuing $500.0 million of 2.900% Senior Notes due March 1, 2027 (the "2027 Notes") and $500.0 million 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 we incurred approximately $9.1 million in debt issuance costs during fiscal 2022.

Debt discounts and debt issuance costs are presented in the Consolidated Balance Sheets as a net direct deduction from the carrying amount of the debt liability.

The debt discounts and debt issuance costs are amortized to Interest expense in the Consolidated Statements of Income over the contractual term of the debt, leveraging the effective interest method.

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

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We returned $460.4 million and $385.9 million to our stockholders in the form of share repurchases and dividends during fiscal 2025 and 2024, respectively.

During fiscal 2024 and 2023, we paid dividends of $150.7 million and $138.6 million, respectively.

In the third quarter of fiscal 2024, our Board of Directors approved a 6% increase in the regular quarterly dividend from $0.98 to $1.04 per share.

Fiscal 2024 marked the 25th consecutive fiscal year we have increased dividends on a stock split-adjusted basis, highlighting our continued commitment to returning value to our stockholders.

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

Share Repurchase Program

We may repurchase shares of our common stock under our share repurchase program from time-to-time in the open market or via privately negotiated transactions, subject to market conditions.

We suspended our share repurchase program beginning in the second quarter of fiscal 2022, with the exception of potential minor repurchases to offset dilution from grants of equity awards or repurchases to satisfy withholding tax obligations due upon the vesting of stock-based awards, to prioritize the repayment of debt under the 2022 Credit Facilities.

We resumed our share repurchase program in the third quarter of fiscal 2023.

During fiscal 2025 and 2024, we repurchased 684,960 shares for $300.5 million and 537,800 shares for $235.2 million, respectively.

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

We had $64.8 million that remained authorized under our share repurchase program as of August 31, 2024, all of which expired upon the conclusion of fiscal 2024 and was not available for share repurchases after that date.

On September 17, 2024, our Board of Directors approved a new share repurchase authorization of up to $300 million in aggregate, which will be available during fiscal 2025.

On September 17, 2024, our Board of Directors approved a new share repurchase authorization of up to $300 million in aggregate, which was available during fiscal 2025.

This authorization expired upon the conclusion of fiscal 2025 and was not available for share repurchases after that date.

On June 17, 2025, our Board of Directors authorized up to $400 million for share repurchases on or after September 1, 2025 through September 30, 2026.

Refer to Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , of this Annual Report on Form 10-K for further discussion on our share repurchase program.

During fiscal 2025 and 2024, we paid dividends of $160.0 million and $150.7 million, respectively.

In the third quarter of fiscal 2025, our Board of Directors approved a 6% increase in the regular quarterly dividend from $1.04 to $1.10 per share.

Fiscal 2025 marked the 26th consecutive fiscal year we have increased dividends on a stock split-adjusted basis, highlighting our continued commitment to returning value to our stockholders.

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

Capital Expenditures

For the year ended August 31, 2025, capital expenditures increased by 27.0% to $108.8 million, compared with $85.7 million in fiscal 2024.

This increase was primarily due to higher expenditures related to the development of capitalized internal-use software.

Our acquisitions with the most significant cash flows from fiscal 2022 through fiscal 2024 included CGS and Cobalt Software, Inc.

This increase was primarily due to higher capitalized costs related to the development of our internal-use software.

Our acquisitions with the most significant cash flows from fiscal 2023 through fiscal 2025 included Liquid Holdings, LLC ("LiquidityBook") and Platform Group Limited ("Irwin").

Refer to Part II, Item 8.

Note 6, Acquisitions in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion of the CGS and Cobalt acquisitions and Note 19, Subsequent Events, for information on our proposed acquisition of Platform Group Limited ("Irwin").

CUSIP Global Services

On March 1, 2022, we completed the acquisition of CGS for a cash purchase price of $1.932 billion, inclusive of working capital adjustments.

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

It is the foundation for security master files relied on by critical front, middle and back-office functions.

CGS, operating on behalf of the ABA, is the exclusive issuer 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 30 other countries.

We acquired CGS to expand our critical role in the global capital markets.

Cobalt Software, Inc.

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 and inclusive of working capital adjustments.

Cobalt is a leading portfolio monitoring platform for the private capital industry.

We acquired Cobalt to scale our data and workflow solutions through targeted investments as part of our multi-year investment plan and to expand our private markets offering.

Note 5, Acquisitions in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion of these acquisitions.

LiquidityBook

On February 7, 2025 we completed the acquisition of LiquidityBook for a purchase price of $243.2 million, net of cash acquired, and inclusive of preliminary working capital adjustments.

The purchase price includes contingent consideration of $11.9 million, which reflects the acquisition date fair value of potential future payments that are contingent upon the achievement of certain specified milestones.

LiquidityBook provides cloud-native trading solutions to hedge fund, asset and wealth management, outsourced trading, and sell-side middle office clients.

LiquidityBook operates a proprietary FIX network that enables streamlined connectivity to over 200 brokers and order routing to more than 1,600 destinations across 80 markets globally.

This acquisition adds technology-forward order management and investment book of record capabilities and enhances FactSet’s ability to serve the integrated workflow needs of clients across the portfolio life cycle.

On November 5, 2024, we completed the acquisition of Irwin for a purchase price of $120.2 million, net of cash acquired, and inclusive of working capital adjustments.

The purchase price includes contingent consideration of $9.6 million, which reflects the acquisition date fair value of potential future payments that are contingent upon the achievement of certain specified milestones.

We finalized the purchase accounting for the Irwin acquisition during the third quarter of fiscal 2025.

Irwin is a leading investor relations and capital markets platform for public companies and their advisors.

This acquisition builds on a recent successful partnership between FactSet and Irwin, and expands our ability to address the holistic workflow needs of investor relations professionals with an integrated, modern solution.

Contractual Obligations

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

As of August 31, 2024 and 2023, we had total purchase obligations with suppliers and vendors of $382.6 million and $362.2 million, respectively.

As of August 31, 2025 and 2024, we had total purchase obligations with suppliers and vendors of approximately $352 million and $383 million, respectively.

Our total purchase obligations as of August 31, 2025 and 2024 primarily related to hosting services, acquisition of data and, to a lesser extent, third-party software providers.

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Refer to Part II, Item 8.

Note 11, Leases and Note 12, Debt in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for information regarding lease commitments and outstanding debt obligations, respectively.

Note 10, Leases and Note 11, Debt in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for information regarding our lease commitments and outstanding debt obligations, respectively.

Summary of Cash Flows

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Net cash provided by (used in) financing activities (407,821) (560,850) 153,029

Effect of exchange rate changes on cash and cash equivalents 2,364 4,015 (1,651)

Net increase (decrease) in cash and cash equivalents $ (2,465) $ (77,829) $ 75,364

Effect of exchange rate changes on cash, cash equivalents and restricted cash 3,050 2,364 686

Net increase (decrease) in cash, cash equivalents and restricted cash $ (71,284) $ (2,465) $ (68,819)

For fiscal 2025, net cash provided by operating activities was $726.3 million, which included net income of $597.0 million, non-cash charges of $235.0 million and a net cash outflow of $105.7 million to support our working capital requirements.

The non-cash charges were primarily driven by depreciation and amortization.

The change in our working capital was primarily driven by cash outflows related to payments to resolve the Sales Tax Dispute, timing of vendor payments and client collections, as well as lease payments.

For fiscal 2024, net cash provided by operating activities was $700.3 million, which included net income of $537.1 million, non-cash charges of $201.6 million and a net cash outflow of $38.4 million to support our working capital requirements.

The non-cash charges were primarily driven by depreciation and amortization and, to a lesser extent, stock-based compensation expense.

The change in our working capital was primarily driven by cash outflows related to lease payments and prepaid expenses, partially offset by the timing of payments to vendors.

For fiscal 2023, net cash provided by operating activities was $645.6 million, which included net income of $468.2 million, non-cash charges of $194.6 million and a net cash outflow of $17.2 million to support our working capital requirements.

The non-cash charges were primarily driven by depreciation and amortization, stock-based compensation expense and amortization of lease ROU assets, partially offset by deferred income taxes.

The net cash outflow in working capital was primarily due to an increase in accounts receivable driven by sales and the timing of client payments and cash outflows for lease payments, partially offset by an increase in net taxes payable due to an out-of-period adjustment related to a review and analysis of certain tax positions and timing of tax payments in certain jurisdictions.

For fiscal 2025, net cash used in investing activities was $392.8 million.

The cash used in investing activities primarily consisted of $348.3 million of acquisition-related consideration related mainly to the Irwin and LiquidityBook transactions, $108.8 million of capital expenditures mainly driven by the capitalization of internal-use software development costs, partially offset by $58.2 million in proceeds from our investments in mutual funds.

For fiscal 2024, net cash used in investing activities was $144.3 million.

The cash used in investing activities was primarily related to capital expenditures of $85.7 million, mainly driven by the capitalization of internal-use software development costs and $58.6 million in investments, primarily related to the purchase of mutual funds.

For fiscal 2023, net cash used in investing activities was $95.4 million, mainly driven by capital expenditures of $60.8 million, primarily due to capitalization of compensation costs related to development of capitalized internal-use software and, to a lesser extent, investments in network-related equipment, mainly at our data centers and laptops.

Cash used in investing activities was also driven by the acquisition of a business for $23.6 million.

For fiscal 2024, net cash used in financing activities was $560.9 million, consisting mainly of $250.0 million related to the partial repayment of the 2022 Term Facility, $235.2 million of share repurchases and $150.7 million of dividend payments, partially offset by $91.7 million of proceeds from employee stock plans.

For fiscal 2025, net cash used in financing activities was $407.8 million, consisting mainly of $805.0 million related primarily to the repayment of the 2022 Credit Facilities, $300.5 million of share repurchases and $160.0 million of dividend payments, partially offset by $803.4 million of proceeds from borrowings under the 2025 Term Facility and the 2022 Revolving Facility, in periods prior to its termination, and $81.7 million of proceeds from employee stock plans.

Free Cash Flow

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

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

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 stockholders, 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.

Free cash flow should be considered in addition to consolidated net income and net cash provided by operating activities, but should not be used as a substitute for these key measures of our performance and liquidity.

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

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We generated free cash flow of $617.5 million during fiscal 2025, an increase of $2.8 million compared with fiscal 2024.

This increase was driven by higher cash provided by operating activities, mainly due to an increase in net income, partially offset by higher capitalized costs mainly related to the development of our internal-use software.

This increase was driven by $25.9 million in cash provided by operating activities, partially offset by higher PPE mainly from capitalized costs related to the development of our internal-use software.

Off-Balance Sheet Arrangements

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As we operate globally, we are exposed to the risk that our financial condition, results of operations and cash flows could be impacted by changes in foreign currency exchange rates.

During fiscal 2024 and 2023, we maintained a series of foreign currency forward contracts to hedge a portion of our primary currency exposures, namely the British Pound Sterling, Euro, Indian Rupee and Philippine Peso.

We entered into these contracts with the intent to hedge between 25% to 75% of the currency exposure related to our projected operating income in these primary currencies over their respective hedge periods.

During fiscal 2025 and 2024, we maintained a series of foreign currency forward contracts to hedge a portion of our projected operating expenses in our primary currency exposures, namely the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso.

As of August 31, 2025, the hedge maturity periods of our outstanding foreign currency forward contracts range from the first quarter of fiscal 2026 through the fourth quarter of fiscal 2026.

The following table summarizes the gross notional value of our foreign currency forward contracts to purchase the respective local currency with U.S.

dollars as of August 31, 2024 and August 31, 2023:

August 31, 2024 August 31, 2023

(in thousands) Local Currency Amount Notional Contract Amount (USD) Local Currency Amount Notional Contract Amount (USD)

Indian Rupee £ 4,651,351 $ 55,200 £ 3,363,150 $ 40,300

British Pound Sterling € 41,200 52,372 € 45,000 56,098

Euro Rs 43,800 48,183 Rs 39,000 42,646

Philippine Peso ₱ 1,850,674 32,400 ₱ 1,888,541 33,600

Total $ 188,155 $ 172,644

Refer to Part II, Item 7A.

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Critical Accounting 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 prepare the Consolidated Financial Statements in conformity with GAAP, which requires us to make certain estimates and apply judgments 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.

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The critical accounting estimates and judgments that we believe to have the most significant impacts to our Consolidated Financial Statements are described below.

We are subject to taxation in the United States and various foreign jurisdictions in which we conduct our business.

Our provision for income taxes is an estimate based on our understanding of laws in federal, state and foreign tax jurisdictions.

We are subject to taxation in the U.S.

and various state, local and foreign jurisdictions in which we conduct our business.

Our provision for income taxes is an estimate based on our understanding of laws in these federal, state, local and foreign tax jurisdictions.

These laws can be complicated and are difficult to apply to any business.

The tax laws also require us to allocate our taxable income to many jurisdictions based on subjective allocation methodologies and information collection processes.

Our effective tax rate differs from the statutory rate primarily due to the impact of state taxes, foreign operations, R&D and other tax credits, tax audit settlements, the tax benefit from stock option exercises and the FDII tax deduction.

Our provision for income taxes is subject to volatility and could be adversely impacted by numerous factors such as changes in earnings or tax laws, regulations, or accounting principles, including accounting for uncertain tax positions or interpretations of them.

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The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not (defined as a likelihood of more than 50%) that a tax position will be sustained based on its technical merits as of the reporting date.

The second step, for those positions that meet the recognition criteria, is to measure and recognize the largest amount of benefit that is greater than 50% likely of being realized upon effective settlement with a taxing authority.

The second step, for those positions that meet the recognition

criteria, is to measure and recognize the largest amount of benefit that is greater than 50% likely of being realized upon effective settlement with a taxing authority.

As the determination of liabilities related to uncertain tax positions and associated interest and penalties requires significant estimates and assumptions, there can be no assurance that we will accurately predict the outcomes of these audits.

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Stock-based Compensation

We measure and recognize stock-based compensation expense for all stock-based awards granted to our employees and our non-employee members of the Board of Directors ("non-employee directors") based on their estimated grant date fair value.

To estimate the grant date fair value, we utilize a lattice-binomial option-pricing model ("binomial model") for our employee stock options and the Black-Scholes model for non-employee directors stock options and common stock purchased by eligible employees under our Employee Stock Purchase Plan.

Both models involve certain estimates and subjective assumptions regarding our stock price volatility, the expected life of the award, the term selected for the risk-free rate and the expected dividend yield.

We measure and recognize stock-based compensation expense for all stock-based awards and purchases of common stock under the employee stock purchase plan ("ESPP") based on their estimated grant date fair value.

We utilize a lattice-binomial option-pricing model ("binomial model") to estimate the grant date fair value for our employee stock options and the Black-Scholes model to estimate the grant date fair value for stock options granted to the members of the Board of Directors ("non-employee directors") and common stock purchased by eligible employees under our ESPP.

Both the binomial model and Black-Scholes model involve certain estimates and assumptions such as:

• Risk-free interest rate - based on the U.S.

Treasury yield curve in effect at the time of grant with maturities equal to the expected terms of the stock-based awards granted.

• Expected life - the weighted average period the stock-based awards are expected to remain outstanding.

• Expected volatility - based on a blend of historical volatility of the stock-based award's useful life and the weighted average implied volatility for call option contracts traded in the 90 days preceding the stock-based award's valuation date.

• Dividend yield - the expectation of dividend payouts based on our history.

The binomial model also incorporates market conditions, vesting restrictions and exercise patterns.

Our performance share units ("PSUs") require management to make assumptions regarding the probability of achieving specified performance levels established at the time of grant, which are reviewed on a quarterly basis.

The ultimate number of

common shares that may be earned from a PSU is determined pursuant to a payout range based on the achievement of specified performance levels.

For our performance share units ("PSUs"), management makes quarterly assessments of the probability of achieving specified performance criteria established at the time of grant.

The ultimate number of common shares that may be earned from a PSU is determined pursuant to a payout range based on the achievement of specified performance levels.

We estimate expected forfeitures of equity awards at the date of grant and recognize compensation expense only for those awards expected to vest.

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Note 15, Stock-Based Compensation in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired at the acquisition date.

On the date of acquisition, goodwill is assigned to one or more reporting units, which are consistent with our segments.

Goodwill is not amortized as it is estimated to have an indefinite life.

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Impairment is tested at the reporting unit level and if the carrying value of the reporting unit exceeds the fair value, then the goodwill is considered impaired and written down to the reporting unit’s fair value.

The impairment loss for the reporting unit cannot exceed the carrying value of the goodwill allocated to that reporting unit.

We may elect to perform a qualitative analysis for the reporting units to determine whether it is more likely than not (a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value.

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The quantitative goodwill impairment analysis is used to identify potential impairment by comparing the carrying value of a reporting unit with its fair value.

To perform this analysis, we apply the income approach which utilizes discounted cash flows, along with other relevant market information.

Significant judgment is involved in determining the assumptions used in estimating future cash flows.

These assumptions include, but are not limited to, the following estimates:

To perform this analysis, we apply the income approach which utilizes discounted cash flows and other relevant market information.

Significant judgment is involved in determining the assumptions used in estimating future cash flows, such as:

expected sales, working capital needs to support each reporting unit, capital expenditures and related depreciation and amortization, operating expenses, expected tax rates and the weighted average cost of capital for each reporting unit.

Our cost of capital is based on assumptions about interest rates, as well as a risk-adjusted rate of return required by our equity investors.

Changes in these estimates can impact the present value of expected cash flows used in determining fair value of a reporting unit.

If the carrying value of the reporting unit exceeds the fair value, then the goodwill is considered impaired and written down to the reporting unit’s fair value.

The impairment loss for the reporting unit cannot exceed the carrying value of the goodwill allocated to that reporting unit.

Intangible Assets

We amortize our identifiable intangible assets over their estimated useful lives, which are evaluated annually to determine whether events and circumstances warrant a revision to the remaining period of amortization.

If the estimate of the remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life.

Determining the useful life of intangible assets requires judgement and an understanding of our planned use of the asset, among other factors.

Intangible assets are tested for impairment qualitatively on a quarterly basis or whenever events or changes in circumstances indicate that the carrying value of an asset group is not recoverable.

If indicators of impairment are present, our intangible assets are tested for impairment by comparing the carrying value to undiscounted cash flows and, if impaired, written down to fair value based on discounted cash flows.

Significant judgment is involved in determining the assumptions used in estimating future cash flows.

These estimates and judgments are critical, as they directly influence the calculated fair value of our reporting units and, consequently, the results of our goodwill impairment assessment.

Refer to Part II, Item 8.

Note 8, Goodwill and Note 9, Intangible Assets in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further details.

Note 7, Goodwill in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further details.

Business Combinations

We account for business combinations using the purchase method of accounting.

The acquisition purchase price is allocated to the underlying identified, tangible and intangible assets and liabilities assumed, based on their respective estimated fair values on the acquisition date.

Under this method, the acquisition purchase price is allocated to the underlying identified tangible and intangible assets acquired, and liabilities assumed, based on their respective estimated fair values on the acquisition date.

The excess of the purchase consideration over the fair value of the identified assets and liabilities is recorded as goodwill and assigned to one or more reporting units.

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Note 5, Acquisitions in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.

Property, Equipment and Leasehold Improvements

We review our PPE to determine if any indicators of impairment are present on a quarterly basis or whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

PPE and Intangible Assets

We amortize our PPE and identifiable intangible assets over their estimated useful lives.

Determining the useful life requires judgment and an understanding of our planned use of the asset, among other factors.

If different useful lives had been used, the resulting amortization or depreciation expense recognized may be materially different.

If the estimate of the remaining useful life is changed, the remaining carrying amount of the PPE and intangible asset is, respectively, amortized or depreciated, prospectively over that revised remaining useful life.

We review our PPE and intangible assets to determine if any indicators of impairment are present on a quarterly basis or whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

If indicators of impairment are present, the asset group is tested for impairment by comparing the carrying value to undiscounted cash flows and, if impaired, written down to fair value based on discounted cash flows.

A significant amount of judgment is involved in determining if an indicator of impairment has occurred and in calculating the inputs to the impairment calculation.

Indicators we consider include, but are not limited to, a significant decline in our expected future cash flows, a change in an expected useful life, unanticipated competition, slower growth rates, ongoing maintenance and necessary improvements to the assets, or changes in the usage or operating performance.

Inputs to an impairment calculation include estimates related to future cash flows and asset fair values, forecasting asset useful lives and selecting the discount rate that reflects the risk inherent in future cash flows.

If actual results are not consistent with our estimates and assumptions included in our impairment assessment, we may be exposed to losses that could be material.

In performing this assessment, significant judgment is involved in determining the assumptions used in estimating future cash flows and the discount rate.

Refer to Part II, Item 8.

Note 7, Property, Equipment and Leasehold Improvements in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.

Note 6, Property, Equipment and Leasehold Improvements and Note 8, Intangible Assets in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.

Contingencies

We are subject to various legal proceedings, claims and litigation that have arisen in the ordinary course of business, which involve inherent uncertainties.

Assessing the probability of loss for such contingencies and determining how to accrue the appropriate liabilities requires judgment.

If actual results differ from our assessments, our financial position, results of operations, or cash flows would be affected.

We accrue for contingencies when we believe that a loss is probable and the amount can be reasonably estimated.

Judgment is required to determine both the probability and the estimated amount of loss.

If the reasonable estimate of a probable loss is a range, we record an accrual for the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount.

We review these accruals on a quarterly basis and adjust, as necessary, to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other current information.

If actual results differ from our assessments, our financial position, results of operations, or cash flows would be

Refer to Part II, Item 8.

Note 12, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for more information on our contingent matters.

For more information on the accounting of our income tax contingencies, refer to Part II, Item 8.

Note 9, Income Taxes in the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

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-K

Item 7. Management’s Discussion and Analysis