Good day and thank you for standing by. Welcome to the FactSet Q1 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ali van Nes, SVP, IR. Please go ahead. Thank you, and good morning, everyone. Welcome to FactSet's first fiscal quarter 2024 earnings call. Before we begin, the slides we reference during this presentation can be found through the webcast on the investor relations section of our website at factset.com and are currently available on our website. A replay of today's call will be available via phone and on our website. After our prepared remarks, we will open the call to questions from investors. The call is scheduled to last for one hour. To be fair to everyone, please limit yourself to one question. You may reenter the queue for additional follow-up questions, which we will take if time permits. Before we discuss our results, I encourage all listeners to review the legal notice on slide two, which explains the risks of forward-looking statements and the use of non-GAAP financial measures. Additionally, please refer to our Forms 10-K and 10-Q for a discussion of risk factors that could cause actual results to differ materially from those forward-looking statements. Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliations to the most directly comparable GAAP measures are in the appendix to the presentation and in our earnings release issued earlier today. Joining me today are Phil Snow, Chief Executive Officer, and Linda Huber, Chief Financial Officer. We will also be joined by Helen Shan, Chief Revenue Officer, and Kristi Karnovsky, Chief Product Officer, for the Q&A portion of today's call. I will now turn the discussion over to Phil Snow. Thank you, Ali, and good morning, everyone. Thanks for joining us today. In the first quarter, we grew organic ASV plus professional services by 7.1% year-over-year, delivering adjusted diluted EPS of $4.12, and an adjusted operating margin of 37.6%. This quarter, we closed two marquee deals that serve as proof points for our long-term strategy, even as macro conditions remain challenging. The first was a large wealth win at a major U.S. firm where we displaced a competitor. As a result of this deal, our user count increased by more than 17,000 seats. The second was a significant trading win at one of the largest U.S. asset managers, highlighting the strength of our open platform and portfolio lifecycle solutions. We ended this quarter with almost 8,000 clients and 24 net new logos. ASV retention remained greater than 95%, and client retention was 90%. Nevertheless, since our last earnings call in September, sales cycles have continued to lengthen, challenging our near-term forecast. Client budgets remain restricted due to lower deal-making volume layoffs and geopolitical uncertainty. So while the recent Federal Reserve commentary may be positive for the macro environment, we are revising our fiscal 2024 top-line guidance to reflect ASV growth of $110 million-$150 million, or 6% growth at the midpoint. We will also be implementing a cost reduction program in the second quarter of FY 2024. This program will support our investments in multi-year initiatives such as Deep Sector and Real-Time, and allow us to accelerate our AI strategic investments. We expect to review variable costs and personnel-related costs with the goal of delivering adjusted operating margin within our original guidance range of 36.3%-36.7%. Linda will say more about this later in the call. Turning now to our performance by region. Growth this quarter was driven mainly by the large wealth win in the Americas, as well as solid demand for data solutions, offsetting weaker results in other parts of the business. Americas' ASV growth accelerated 88 basis points over the prior quarter to 7.9%, where outside of wealth, lower net hiring in banking and asset managers led to softer demand for workstations compared with a year ago. In EMEA, organic ASV growth decelerated to 5.4%, mainly due to a slowdown in our core buy-side markets in the U.K. and France. Our clients are experiencing reduced revenues and margin pressures, which led to delays in planned projects and slower sales cycles. Higher demand for data solutions partially offset these headwinds. In APAC, we delivered organic ASV growth of 8%, driven by solid gains with asset owners, partially offset by seasonal banking layoffs. From a firm-type perspective, wealth accelerated the most compared with last quarter due to the marquee deal I mentioned earlier. While pipeline visibility remains limited until the broader market recovers some momentum, ongoing C-suite conversations at several firms point to continued opportunity to displace wealth competitors. For deal makers, we added new logos in private equity and corporates, but not at the rate we saw last year. Churn and lower seasonal hiring led to erosion in banking. On the institutional buy-side, cost-cutting and headcount reductions at institutional asset managers caused a deceleration in workstation sales. For asset owners and hedge funds, elongated sales cycles further dampened results. Finally, new business and the sales of data solutions drove growth with partners across regions. Overall, retention was flat in the first quarter, with the positive effects of the fiscal 2023 price increase partially offset by higher cancels and erosion. Over FactSet's 45-year history, new product releases have driven our strong market position. These included Universal Screening in 1986, Portfolio Analytics in 1995, and FactSet Fundamentals in 2008. Last week, we added to this list with the beta release of FactSet Mercury, our new conversational AI interface. FactSet Mercury is a large language model-based knowledge agent. It uses natural language to request company information, provide supporting context, and also suggests next steps. Users can also ask for any chart using natural language, which is then prepared and delivered into Microsoft Office. FactSet Mercury is part of FactSet Explorer, a product preview program. We are working on Explorer with our leading banking clients, and we'll soon offer it to institutional, buy-side and wealth clients. Also, last quarter, we released AI-enhanced transcript highlights and new summaries, which received positive reviews from our users. These are just the first of many workflows that will use generative AI to improve our clients' efficiency. And along with these AI initiatives, work continues on Deep Sector and Real-Time, the Wealth Workstation, and the Portfolio Lifecycle. Each of these multi-year investments is driving growth, including last quarter's big wins in banking and asset management. Finally, the private credit market is growing fast and is almost the size of the leveraged loan market. It is well served by both our data solutions and our middle-office analytics. For example, Cobalt can be used for private credit fund portfolio monitoring. We can also extend our fixed income capabilities to private credit risk assessments, benchmarking, and performance monitoring. In summary, I remain confident in our strategy and the health of our business, and I am optimistic about the opportunity ahead of us. Demand for our high-value products remains strong, demonstrated by our marquee wins this quarter and increased interest from global firms consolidating to FactSet's open platform. I'll now turn it over to Linda to discuss our first quarter performance in more detail. Thanks, Phil, and hello to everyone. As you've seen from our press release this morning, Q1 organic ASV and revenue growth exceeded 7%. I will now share additional details on our fiscal first quarter performance. As Ali noted, a reconciliation of our adjusted metrics compared to GAAP is included at the end of our press release. First, a few observations on macro conditions. Last Wednesday, the Federal Reserve decided to hold rates constant and signaled three quarter-point rate cuts next year. Inflation has eased but remains higher than the Fed's 2% target. Equities rallied on the news as rates fell across the yield curve. While this news was helpful, it will take time for capital markets and deal activity to pick up. As Phil mentioned, we expect that market recovery will come later than we anticipated in our September fiscal year 2024 guidance. For the quarter, GAAP revenue increased 7% to $542 million. Organic revenue, which excludes any impact from acquisitions and dispositions over the last twelve months and foreign exchange movements, increased 7% to $541 million due to higher wealth sales and increased sales of data. For our geographic segments, organic revenues grew by 8% in the Americas, almost 6% in EMEA, and 8% in Asia Pacific. Turning now to expenses. GAAP operating expenses increased 6% year-over-year to $353 million, driven by higher employee expense, technology costs, and royalties. Compared to the previous year, GAAP operating margin increased by approximately 80 basis points to 35%. This was due to a decrease in professional fees, personnel, and facilities costs, partially offset by higher technology-related expenses. On an adjusted basis, operating expenses grew 9%, primarily driven by technology expense, which increased 28% year-over-year. We've continued to invest in technology to drive growth, with technology costs now representing about 9% of revenue, consistent with our medium-term outlook. Employee expense grew 8% year-over-year, primarily due to increased salaries for existing employees. Third-party data content costs increased 12% due to lapping a one-time accrual release in the first quarter of fiscal 2023, as well as higher variable fee expenses. Finally, our continued efforts to rightsize our real estate footprint resulted in a 1% decrease in year-over-year facilities expenses. Looking at margin, adjusted operating margin decreased by 70 basis points to 37.6%, driven by the previously mentioned higher technology expenses, partially offset by lower facilities, professional services, and T&E expenses. As always, you'll find an expense walk from revenue to adjusted operating income in the appendix of today's earnings presentation. As a percent of revenue, our cost of services was about 140 basis points higher than last year on a GAAP basis and about 220 basis points higher on an adjusted basis, largely due to technology and personnel costs. SG&A, as a percentage of revenue, was 230 basis points lower year-over-year on a GAAP basis and about 150 basis points lower on an adjusted basis. This was due to decreases in professional fees, facilities expenses, and personnel expenses. Turning now to tax. Our tax rate for the quarter was 15.2%, compared to last year's rate of 13.4%. This increase was primarily due to lower benefits related to stock option exercises and restricted stock vesting. The remainder of the increase was due to higher pre-tax income and a higher foreign tax rate, partially offset by foreign tax credits. Turning now to EPS. GAAP EPS increased 9.1% - $3.84 this quarter versus $3.52 in the prior year. This was driven by higher revenue and margin expansion, partially offset by a higher tax rate. On an adjusted basis, EPS increased 3.3% - $4.12, driven by revenue growth, partially offset by margin compression and a higher tax rate. EBITDA increased to $219 million, up 9.3% year-over-year, due to higher net income and higher income tax add backs. Finally, free cash flow, which we define as cash generated from operations less capital spending, was $139 million for the quarter, an increase of 56% over the same period last year. This was driven by significantly higher net cash from operating activities, which was nearly $50 million greater year-over-year due to higher cash collections. Turning to share repurchases for the quarter, we repurchased 135,950 shares for $59.9 million at an average price of $440.67. We intend to continue our share repurchases during fiscal 2024, with a target of $250 million of purchases spread ratably throughout the year. We remain disciplined in our buyback program and committed to returning long-term value to our shareholders. Combining our dividends and share repurchases, we returned $378.6 million to our shareholders over the last twelve months. As a reminder, we also increased our dividend by 10% to $0.98 per share in the third quarter of fiscal 2023. Finally, turning to our revised guidance for fiscal 2024. As Phil mentioned earlier, we expect that the market recovery will happen later in the year than anticipated when we first gave guidance for fiscal 2024. Given this revised view, we are guiding to incremental organic ASV plus professional services growth of $110 million-$150 million, reflecting 6% growth at the midpoint, down from our original 7% growth guidance. Given the headwinds in ASV and the lag timing of ASV in the first half of the fiscal year, we are lowering our expected revenue range to $2.2 billion-$2.21 billion. At the midpoint, revenue growth is also expected to be approximately 6%, a deceleration of about 75 basis points from our previously issued guidance. We've reduced our GAAP operating margin guidance to 32.5%-33%, which is down from 33.1%-33.5%. However, it should be noted that we have not changed our adjusted operating margin guidance of 36.3%-36.7%. At the midpoint, this provides 30 basis points of continued margin expansion. While we have already met our adjusted operating margin medium-term outlook of 36%, we are committed to balancing continued sustainable margin expansion with investments to drive top line growth. It is also worth noting that our effective tax rate guidance has been reduced by 50 basis points to 16.5%-17.5%. Finally, adjusted EPS is expected to range from $15.60-$16, which represents 7.8% growth at the midpoint and a $0.10 reduction from guidance at the midpoint. As Phil mentioned, we continued to execute disciplined expense management to support strategic investment to grow our top line. Accordingly, we expect to take a $10 million-$15 million charge in the second quarter of fiscal 2024. Focus areas for expense reduction include both variable and personnel-related costs. Despite the uncertain environment, we remain confident in our long-term growth. We have a diverse pipeline and are seeing improved price realization and increased interest in our products. In addition, our enterprise contracts and diverse end markets provide us with downside protection in an uncertain market. As a result, we are confident that we are positioned well for the future. We are now ready for your questions. Operator? Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Seth Weber from Wells Fargo. Hi, good morning. Thank you. I guess I just wanted to ask to get a little bit more clarity on the updated outlook. Can you just talk about whether deals are, you know, falling out of the pipeline? Are deal sizes getting smaller? Any pressure on the pricing side, or do you really feel like this is all just kind of, you know, getting pushed to the right just while your customers try to navigate the macro environment? Thank you. Hey, Seth. Thanks. It's Phil. I'm gonna say a few words, and then I'm sure Helen has more detail. So, you know, I think clearly we had a good Q1. We had a great win there on the wealth side. Q2 looks to be a little bit weaker than we originally anticipated, and it's always hard to predict when market sentiment is going to turn around, essentially. So we're still very optimistic about Q4. And as usual, we have a tale of two halves. So I think we have the product, the strategy, the competitive positioning to really do well, but we are facing some headwinds in the market just in terms of clients, their budgets. Obviously, they're looking very closely at their own headcount. Yeah, and maybe I can add a little bit to that. Thanks for the question. So as Phil just said, I do think that the continued demand for our middle office offerings and data and middle office services has really been strong, and similarly for data feeds. Right now, the total cost of ownership has been the differentiator for us. B ut there are the exogenous events that are impacting budgets and timing and, and hiring. So what changed from 90 days ago? Let me try to break that down a bit for you. I would look at around 40 basis points coming from the impact from pricing pressures and lower price realization. We definitely see that being a part of the, the dynamic that's, that's playing out. We're seeing some impact from higher erosion. That's about, you know, 30-some basis points, and then 25 basis points coming from what we view as delayed decisions in spend. We're seeing more of that coming into the fourth quarter, and, and from that perspective, that makes it a little bit tougher to gauge exactly when that will come to fruition. We have not seen a lot of fallout, so that, again, helps us think about the strength of our business, but not necessarily the timing of it. If you think about the reduction by firm type, the way we look at it is about half of it will come from deal makers, which is largely banking, and we can see right now weaker net hires. But it's very difficult to tell until we get into the second half, as you know, for seasonal hiring. From the buy-side, that's about 25% of our total. There, we're seeing a bit of the higher erosion due to cost realization or cost rationalization, rather, and also delayed decisions. We're actually seeing good opportunities in the six-plus figure, but those take longer to come about. And then lastly, on wealth strength, like was mentioned, very strong on the wealth side of a great win this quarter, wins this quarter. But if I take a look at what else is happening there, is that we're seeing some slowdown in advisor hiring and in some losses on smaller firms. We still see a path to hit the higher end of a revised range, would have put us back into the midpoint. Things such as higher conviction on the improvement in the capital markets, so that we would see more investments that are in flight go back into technology. Higher investment banking flow that we think would drive higher seasonal hiring. And then we've got a number of large competitive opportunities in our pipeline, all in that six- and seven-figure deal range, and those can change and determine whether or not we hit the high end as well. So hopefully that gives you a sense of what drives the delta between our guidance. That's great color. Thank you. I appreciate it. You're welcome. Thank you. One moment for our next question. Our next question comes from the line of Toni Kaplan from Morgan Stanley. Thank you. I was hoping you could talk a little bit about the price increase that you're implementing for the upcoming calendar year. I know, Helen, you just mentioned some difficulties in passing through price, but I guess what's the sort of list price increase and what your expectation is for how that flows through? Thanks. Yeah, sure. Thank you, Toni. You're right. We, the Americas is done on January 1, and then our international, we'll see that come through in April. So interestingly, the actual rate cards, we have not increased. What we do is we have an annual price increase based off of our contracts, and quite, quite frankly, up till now, we've seen everything go through pretty, pretty well. In other words, clients are not pushing back on the price increase per se. They understand it. They understand the improvements we've made and the enhancements we made. The issue that we have a little bit more of is clients are taking the opportunity then to perhaps go through a review of their list, so we see some erosion that comes from as a result, and also from a price realization perspective. So in other words, we're seeing some downshift. We have to, we have to kind of approve deals that are a bit lower on our price realization, about a point lower than we saw in Q4, for example, and that's driving some of that delta. So we expect to have to continue to be competitive, especially on new deals. And but the actual annual price increase so far has been received pretty much in line with what we've seen in the past. Terrific. Thank you. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Alex Kramm from UBS. Yes. Hey, guys. Maybe a little bit too short-term focused here, but talking about the second quarter a little bit more in detail, you said that was the biggest change of your, of your outlook. So when I look at last year, I think you added $54 million in the quarter organically, and I think 31 of that was pricing. So are you basically saying pricing should be fairly consistent, but then you, you may actually have, you know, a negative elsewhere? Or how, how would you think about the second quarter specifically? Because I know there's a lot of things going on, including at my firm. Alex, hi, Talent. Thanks for your question, and thanks for the specifics. So you've, you've hit the nail on the head on a, a number of your points. So yes, last year we had a very strong Q2. And so this year, while we've not changed our rate card, the actual annual price increase is a little bit lower than last year. So that is part of the reason, so you're spot on there. The other is that we do know or anticipated a couple of material headwinds. One is the impact of the, acquisition of, of Credit Suisse by, by UBS and the downsizing that will occur there. Now, we're, we, we might be a little bit conservative there, but that's gonna have a pretty material impact. T o our growth year over year, and that's where the Q2 we will see, you know, a much more weak Q2 growth rate. All right, thanks for the color. Thank you. One moment for our next question. Our next question comes from the line of Faiza Alwi from Deutsche Bank. Yes, hi, good morning. Thank you. I wanted to follow up on the cost savings that you mentioned. So maybe, Linda, can you talk a little bit more about the timing of those savings and how we should think about that as we go through the year? And maybe in general, sort of how do you think about, you know, just your flexibility as it relates to EPS, you know, flexibility around level of investments and what your priorities are? Yeah. Hi, Faiza. Yes, we are thinking through what it means to have, at the midpoint, a $15 million reduction in revenue. So obviously, we would like to offset that, and it is our intention to hold adjusted operating margin where we said at about 36.5% midpoint. So we've got to adjust our expenses. We've talked about taking a charge, which we will have more details on in the second quarter earnings call. So that's at the half year mark, if you will. So we're shooting for about $30 million in cost cuts, and we're looking at 10-ish or so $10 million of cost cuts. The first thing you do is look at your variable costs. The easiest one is T&Es. We're looking at sort of $1 million-$2 million of a cut there. Professional services is another one we're looking at, call that $3 million-$4 million. So call that bucket sort of $5 million in total. And then we're looking also at our bonus calculations. So we've just taken our guidance down a bit, and we would expect that our bonus pool will come down a bit as well, maybe about $5-ish million, but we don't know until we get to the end of the year. So that would be about a total of $10 million. And then we've talked about a $10 million-$15 million charge, which would probably lean more toward personnel and headcount reduction thoughts. We're working through that right now. We have not made any final decisions on that. Of course, that process has to be handled very, very carefully with an eye toward holding our investment funding, which is incredibly important to us, particularly given AI, which we'll be talking about in a bit. But we wanna make sure that we bring our expenses back into line with our revenues. Now, if you look at our buckets, we had talked before about, if you look at our third-party data costs, they're up a bit in the first quarter because we lapped a really good audit release last year, but those will be about flat for this year. And if you look at our real estate costs, we've taken pretty close to $90 million in charges to rightsize our real estate footprint. So on that one, those costs will actually be flat to down a bit year-over-year. Technology costs are going up. We've talked a lot about that. This is a technology company and three big drivers for the tech costs, amortization coming through because we're building more of our software, as we've talked about. Also, more cloud expense and also more third-party software purchases. Footnote there on cloud expense, please watch that carefully. If Kristi and the team are successful with what they're trying to do for AI, cloud expense may go up. We have to watch that carefully, but that's an important area of investment for us, so we'll keep our eyes on that, which leaves people, which is about 65% of our expense base. So we're gonna have to make sure we've got everyone in the right place for what we're trying to do going forward. And I think that probably would provide about enough detail. In terms of the ramp for expenses, we put up $338 million for the first quarter. We would expect that to jump up to the neighborhood of $350 million for the second quarter, and then as a result of the charge, sort of flatten out through the rest of the year. And yes, our margin tends to be a bit higher in the first quarter. We would see it might come off a bit as we move through the year, so the sort of normal trend that you see at FactSet. So that's a lot of information. I hope that's helpful, and really appreciate your question, Faiza. Thank you, Linda. That's very helpful. Thank you. One moment for our next question. Our next question comes from the line of Manav Patnaik from Barclays. Thank you. I just want to follow up on, you know, kind of the macro discussion. You know, usually when you have these times of cost pressures, budget pressures, et cetera, there's a lot of talk around vendor consolidation as well. So I was just hoping, are you seeing any opportunities in terms of, you know, maybe winning business from the lower end, or maybe there's some M&A opportunities, you know, because of that? Just, just hoping you could address that. Yeah. Hey, Manav, thanks for the question. It's Phil. We certainly are seeing opportunity. So, you know, as we go through these periods of market uncertainty, it's always a great opportunity for FactSet to work with our clients who typically wanna do more with us and trust us. So that's become an even more sophisticated conversation as our product suite has expanded. And just in the last few weeks, I've heard a couple of very encouraging situations where it just feels like there's more of a top-down push now at the bigger clients to really save- T o drive cost savings in our direction. So that is encouraging to me. I think at some firms, there was still a bit of choice given to users. But we are an anchor partner of choice for our clients based on our strategy and our open platform. Our investments in Generative AI and our approach there is landing really well. So I feel, I just feel more optimistic than I have in a long time about the long-term prospects of FactSet and our competitive position. I'm happy to go through this firm type by firm type, either on the call today or some other time with you. But overall, I think it's just a timing thing for us and getting through this period of uncertainty in the markets, and I think then we're in really good shape. Got it. Maybe I can just add a little bit, Manav, just along what Phil just said. So, you know, like he, he was talking about, clients are going through right-sizing exercises. That's been happening for several quarters, and most clients, their budgets are more, more flat. But what they're being asked is to provide more sophisticated tools and reporting to their clients, and yet they have not enough people or dollars or their current technology and processes, some of which can be internal, just can't scale. And that's why we're so well positioned on that front. And that's why also from an open platform perspective, you can do replacement pieces, not need the entire piece, the entire workflow replaced, but, but pieces, and that's worked into our advantage as well. So that, that really goes to what Phil was just talking about, which is there's a lot of good activity, and timing is really the question, 'cause of how complex they are. Thank you. One moment for our next question. Our next question comes from the line of Heather Balsky from Bank of America. Hi, thank you for taking my question. I was just hoping you could talk a little bit about how you're thinking first half versus second half, and the different drivers between the two, I guess, parts of the year. You know, in prior, I guess, last earnings, you kind of had us think about the recovery into the back half. It sounds like it, it's maybe pushed out a bit. But, you know, when do you see capital markets come back? Kind of what, what's baked into the first half versus the second half? Thanks. Yeah, Heather, it's Linda. I actually listened to an interview with Brian Moynihan on the way up this morning, so maybe we'll quote you back your own firm's information here. I think the question is the timing of the turn, and I don't think, you know, anyone can predict that particularly clearly. If they can, they should be, of course, running a hedge fund. But in any case, we had thought this might come a little bit sooner. What we're trying to say is that the turn is going to come a little bit later in the year than we had thought. It should be noted that investment banking and banking hiring is a lagging indicator, okay? So we've had 500 basis points of interest rate increases. Times got tougher, and so hiring is, in fact, a lagging indicator. There is a view that I also heard this morning, not from your boss, that Jay Powell shot the bears last week. So how long will it take for capital markets to come back? If you speak to various institutions, they're saying they're seeing much greater activity right now. The ten-year this morning was at 3.9, which beats the heck out of five. So we would expect that things will turn up. How quickly will that happen? Very difficult to say. So we're trying to be realistic about what we think about the pacing of that turn. But we do, particularly with the Fed announcement last week, we do think that it is coming. It just may take a bit longer than we thought, and there's a lot of focus on AI. We have incredible conversations going on with our clients, and we'll be speaking more about that as others might want to ask about it. But we do, you know, we do see the turn coming. It's just a question of when. So hope that makes things a bit clearer, but, we appreciate your boss's interview this morning. Thank you. I appreciate the color. Thank you. One moment for our next question. Our next question comes from the line of Shlomo Rosenbaum from Stifel. Hi, good morning. Thank you for taking my question. Linda, for specifically for you. You talked about what you're doing in terms of cost cutting. But I was wondering, just as I look at, you know, various levers that might still be available, when I think about it, like, how much can you gain efficiency by AI? I think a lot of the AI you're talking about are for clients. What about the company's own ability to influence some AI internally? I hear from other companies that they can gain efficiency that way. And then just again, you know, the centers of excellence, you've got 68% of headcount over there. Is that kind of peaked out over there, or is that another lever that can continue to be pushed and where does that max? Yeah, Shlomo, I'll let Phil talk a little bit about how far we can go with the centers of excellence. But you're right, we have good representation in those centers of excellence, and that's working really, really well for us. We do have our thoughts on efficiency coming from Gen AI. Probably a little bit premature to talk about that. We're gonna focus on the client side first, and that's really where we're looking hardest right now. But efficiency for engineers is really important. Efficiency for our you know our help desk kind of function is very, very important. And in future calls, we'll talk more about that. Shlomo, to answer a question you didn't ask, we did want to thank you for your noting that we had improved free cash flow and that we collected about $50 million more in cash collection than we did in the previous period last year. So in addition to our giant macro calls that we have to make, we also have to make sure we're collecting our cash appropriately. So appreciate your note on that, but I'm going to turn it over to Phil on COEs and also on the Gen AI opportunity for ourselves. Phil? Yeah, thanks. Thanks, Shlomo. Yes, so I think there are three good buckets of cost opportunity internally for generative AI. One is engineering. So we have a lot of engineers at FactSet, and we've successfully piloted GitHub Copilot with a number of groups, and I think we're deploying that more broadly now. So like other firms, we're seeing great efficiency just in terms of the amount of code that someone can produce in the same amount of time. So that is a good opportunity for us. On the content collection side, there's also a good opportunity, and, you know, over the decades, we have continued to automate more and more of content collection. So this is just a bit of an inflection point. But I was in India, you know, a couple of months ago and sat down with a number of teams, and all of them were able to demonstrate to me, in some way, shape, or form, a really good efficiency that they could get from collecting all kinds of different databases. And then on the sales front, similarly, I sat down with someone on our help desk, and we have a Copilot for them, which is really good about generating a code that a user might want. And 50% of our help desk calls tend to be coding calls, so you can imagine that that's a great efficiency. So the question for us and for any other firm, frankly, if you ask anyone about this, is whether or not you have that efficiency go through to margin or if you use it in other ways, right? So we have a long list of things we'd like to do on the product side. So we're still, A, evaluating how much efficiency we can get and how we'd want to spend that money. Any real impact from those three things, I wouldn't expect to see until FY 2025, next fiscal year, but we might be able to recognize some of it in the like, later in the second half of this year. The centers of excellence, we have great employees there. I think the question is just, can you continue to go up the value chain in terms of what you do in those locations? So we're always evaluating our people and location strategy, and I think we've all learned in the last three years that there are even more options open to us than there might have been in the past. So overall, very optimistic about what we can continue to do to drive efficiency and drive the top line through more product. Thank you. One moment for our next question. Our next question comes from the line of Andrew Nicholas from William Blair. Hi, good morning. Thanks for taking my question. I wanted to ask on kind of the M&A opportunity set and your appetite there. It sounds like, you know, with the market, or I would expect that with the market being a little bit choppier in the end markets, or client budgets rather, being a bit harder to pin down, that you might be seeing maybe some more opportunities or some more reasonable multiples for potential acquisitions. So if you could touch on that and then maybe kind of bigger picture on the same vein. Do you think that AI and its ability to drive content collection, I think, Phil, you said it, it's reaching an inflection point. Does that have an impact on, you know, potential multiples as you acquire data assets? Are they easier to get? Are they more valuable now? Just kind of like a bigger picture question on the value of data assets. Thank you. Yeah, thank you. There's a lot in there. So, you know, on the M&A front, the three buckets that we continue to spend time on are wealth, wealth technology, private markets, and continuing to fill out the portfolio life cycle. So those are the three areas of higher interest. We do look at other interesting content assets. And yeah, your instincts are right. The market's beginning to thaw a little bit. I think a lot of sponsors are beginning to bring assets to market as they need to show some returns to their clients. I don't know about the multiples coming down part. That's still to be determined, but we're in a much better position, you know, than we were six months ago, just because we've executed very well on the CUSIP acquisition and effectively gotten our leverage down to the range that we said that we would. We did what we said we were going to do. So we're active, you know, we're looking at tons of stuff. On the AI front, I mean, I guess I'll answer it this way: I think the winners in artificial intelligence are going to be people that own the data, right? So we're in a great position there because we have a ton of data that we collect ourselves. We obviously have a lot of third parties that contribute data into our ecosystem, and we connect that well. That's the real value there. And then clients are also trusting us with their data. So, you know, potentially data, the price of data assets may go up, but also it might be easier for some newer firms to collect data. Now, newer firms that have data are going to need very often platforms like FactSet to monetize that. It's hard to go into a bigger bank or a bigger asset management as a small company and get their attention and get through all of the different things that you need to get through to have that sale. So we're in a great position here. And yes, we're actively looking at what's available in the market. Very helpful. Thank you. Thank you. One moment for our next question. Our next question comes from the line of George Tong from Goldman Sachs. Hi, thanks. Good morning. You talked about restructuring to take out variable and personnel-related costs. Can you elaborate on which parts of the business this is affecting? So how much of this is coming from the desktop business, wealth business, data feeds, et cetera, and how these cost actions are spread out geographically? Whether the actions are more concentrated in certain parts of the world versus others. Yeah. Hi, George, it's Linda. We're not gonna talk about headcount reductions via firm types. The main reason being that we haven't made our full decisions yet. We're looking to put our investments toward our higher value and our emerging opportunities. And obviously, we're looking really closely at products that we may have had for a while or opportunities that maybe have not lived up to everything that we had hoped for them. Also, you know, in terms of where that headcount might come from, obviously, we have to look hard at our onshore locations to make sure we're getting the best use out of our resources there. But again, all this is in progress right now, and we'll have a little bit more information as we go into the Q2 earnings call. But we, we haven't made those decisions yet, and I don't think we're gonna give that degree of granularity, even when we get to that time. We're looking to take out $10 million-$15 million on costs. We're gonna do it very thoughtfully. Senior management of the firm is looking at this with, with great caution to make sure that, we're, we're really thoughtful about what we're doing. This doesn't come easily to us, so we wanna take the time and get it right. And, you know, I don't think we're gonna go into too much more detail than that. Got it. Thanks for the color. Thank you. One moment for our next question. Our next question comes from the line of Craig Huber from Huber Research Partners, LLC. Great, thank you. I was hoping you could give a little more clarity on the workflow breakdown in the quarter, year-over-year, by client type, dealmakers, partners, wealth, and institutional buy-side. I'm also curious. Are you basically assuming the second half of the year, which areas pick up significantly versus what you've seen in the first half? Thanks. Well, we won't give exact numbers, but, you know, what I can say is that, you know, banking was probably affected the most, and I think you saw that in our press release, right? We saw, I think, much weaker hiring or more churn on the banking side than we did last year. On the asset management side, you know, things came down a little bit, not dreadfully. We did see definitely weaker penetration in the front office. So we've begun to see the buy-side clients, I think, reduce headcount a little bit more than they have in the past. But overall, the growth rates of asset management, asset owners and hedge funds didn't come down dramatically. Wealth went up quite a bit because of that big deal we had in Q1, and then some of the smaller parts of our business, like private equity, venture capital, and corporations. In an environment like this, we did add new logos in both of those areas, but not at the rate that we might have had in previous years. So hopefully that helps. That's perfect. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Kelsey Zhu from Autonomous. Thanks for taking my question. So on wealth, I think you previously talked about an acceleration of growth in FY 2024 and the general expectations of expanding share and expanding TAM. Obviously, we've seen a large win this quarter, but I was wondering if you can tell us a little bit more about the key drivers and strategy behind that acceleration of growth. You've also talked about expanding into workflows outside of the advisory dashboard, so I was wondering if you can give us an update on that as well. Thanks. Hi, Kelsey. It's Helen. Thanks for your question, and let me try to get to it. So when we think about wealth, as we mentioned, we had a very good win this quarter. That helps us a lot. And so when we think about what wealth clients are trying to do right now, is that they are looking really to improve and modernize their platform. The story with a lot of the large wealth firms, as you know, and now we're seeing that now with the mid-size firms coming through. So that's where we're seeing more of that deal flow. Just as a reminder, for the large clients that we have been able to win through competitive displacement, that includes Merrill, Royal Bank of Canada, Raymond James, and Bank of Montreal. With this newest one, which actually for us is one of the ones that the longest or rather the highest total contract value, it was a displacement of a long time incumbent. So we look forward to building that relationship with them for the long term, since our contract with them is actually longer than average, you know, over five years. So as wealth clients, now the mid-tier client, wealth clients are now coming on board and wanting to, M odernize their platform because their clients are demanding more sophisticated and digital technologies, and they don't have the platform to be able to scale, and that's where they're turning to us. Total cost of ownership is really quite key, and so the discussions that we're having include everything from, and this is back to your question, whether or not they wanna get the data from APIs, for example, which does require more development costs. They need people to put that in, versus say, one of the products we're seeing a lot of demand for, which are widgets, which are easier to put in and therefore quicker. So those are some of the dynamics we're seeing. That's where we're expanding beyond the wealth platform only and going into data, and then also into the CRM side, which is allowing our wealth clients to focus on their top line and giving their advisors the tools to be able to drive top line growth. Thank you. One moment for our next question. Our next question comes from the line of Russell Quelch from Redburn Atlantic. Yeah, hi, thanks for having me on. So you had good user count growth and slowdown in the client growth, and I think that's because of those two large deals you called out. So I'm interested in, is this a purposeful tilt in the sales strategy towards targeting larger enterprise deals? And therefore, should we expect ASV growth to be maybe more lumpy, more volatile on a quarterly basis going forward as a result of that approach? And I also wondered, can you be a bit more specific around what you've assumed to be the size of the impact from Credit Suisse in your ASV this year, and if that's all gonna come in the second quarter, please? Yeah, I'm not sure we'll be able to speak to the exact size of that. But, yeah, I think the opportunity for us to do much larger deals is increasing. And what is really encouraging, Russell, is, you know, across wealth, which we just saw a big win in, we had a very nice win on the institutional buy side this quarter in trading, and the revenue for that doesn't really materialize until those trading systems get implemented, so that can take a while. We had a fantastic large win in Q4 on the managed services side for the, for performance. And then in banking, we've had some significant wins where we've completely displaced a competitor because of Deep Sector. So I'm beginning to see in my conversations that, you know, with the C-suite of our bigger clients, a real appetite to engage more with FactSet. So yeah, I hope stuff's lumpy, particularly on the upside, right? And you know, when you get those eight-figure contracts or those seven-figure contracts, it can sway things. I think one of the beauties about FactSet's business model is our consistency, though. And I think as markets return to more normalcy, we'll still get a lot of singles, doubles, and triples, which will, I think, continue to hopefully smooth things out. But yeah, we're always hunting for those big deals, and the possibility of us getting those now is much larger, just based on the product suite and our open strategy. Thank you. One moment for our next question. Our next question comes in the line of Jeffrey Silber from BMO Capital Markets. Thanks so much. Wanted to go back to AI. You had mentioned that your focus is more on the client side, and I believe you launched FactSet Mercury. Can we have a little bit more color on that and maybe what your plans are going forward? Thanks. Sure. Hi, Jeffrey, this is Kristi. Yeah, we're very excited about FactSet Mercury. But maybe it will be helpful if I talk a little bit about the whole AI Blueprint, and just highlight the areas in there where I think FactSet is really differentiated in our approach to responsibly leveraging AI to deliver value to our clients. So the first pillar of the blueprint is all about what we call Mile-Wide Discoverability. And FactSet Mercury, which we talked about in the press release, it's our conversational AI interface, and it's designed to unlock discoverability of all of the content and functionality that FactSet has to offer for our users. And it's really gonna become the mainstay of the FactSet user experience of the future, which is going to be a lot more personalized and insight driven. And I think what's really interesting with Mercury, it's really our approach to providing auditability back to the reports and documents in context. That's going to be a real time saver for users, because it's gonna enable them to act quickly on that information that they're getting back and then move on with a high level of confidence to the next steps that they're taking. So really, throughout the whole development process leading up to the beta release, we conducted extensive user research, and through this, we really validated how important it is to deliver that auditability of the data back to our users. And we've already gotten great feedback on this and how we're approaching that in the client meetings that we've had. As well as the other features that it offers, like suggested prompts and next steps to guide users to insights that they might not have even realized were available. The second pillar of the AI blueprint is what we call Mile-Deep Workflow Automation. So our strategy is really way beyond building an answer bot and kind of stopping there. So we're going user by user type, workflow by workflow to leverage Gen AI and help streamline the workflows of each of our different client types that we know really well from over 40 years of supporting them. them. So you would have read in the release that the first release of FactSet Mercury is geared for junior bankers, but it will expand from there. But so for now, for junior bankers, in addition to being able to answer any questions that they have about companies, it can take a lot of steps out of the banker pitch book building workflow process. So one great example of that is just by enabling them to simply ask for any chart in natural language and then have it delivered to them as a custom-formatted FactSet ActiveGraph, which is then forever refreshable inside their pitch deck. So they don't need to search through a gallery. They don't have to adjust any settings. It's just super easy for them. And then, you know, the last pillar of our strategy is what we call Mile-High Innovation Acceleration. You know, we're very excited about what Gen AI unlocks in our own product development process, and our teams are busy here building some really amazing solutions. But it's also, I think, important for everybody to remember that we're developing those, those things in ways that can be leveraged as building blocks by our clients in their own products. And I think our open, flexible approach to this is very differentiated and unique. And we've already begun to commercialize our data solutions in that way, and I think there will be more demand for these building blocks as clients make more progress with executing on their own AI roadmaps. So those are the three pillars, and yeah, we're very excited about FactSet Mercury launching into our FactSet Explorer beta program last week. All right. Thanks, that's really helpful. Thanks so much. Thank you. One moment for our next question. Our next question comes from the line of Owen Lau from Oppenheimer. Good morning. Thank you for taking my question. Just a follow-up on the previous question about AI for client side. I know it's still early, but could you please talk about the demand and timing of monetizing, Mercury or other AI products? How does it help the contract negotiation so far, and how much have you baked into your ASV growth guidance in 2024? Thank you. This is Kristi. Thank you for the question. I can talk a little bit about the approach we think we're going to take here. You know, what I was talking about with Mile-Wide Discoverability with FactSet Mercury, we see that really as a natural evolution of the FactSet user experience. And so some level of conversational experience would be included with our different workstation packages. And you know, I know that this is going to help users unlock more value and improve their efficiency. For what we'd call the Mile-Deep Workflow Automation in our AI blueprint, things like pitch book building and automation with Gen AI for investment banking or portfolio performance commentary for the buy side and, and other mile-deep workflows, we are currently working on the best commercial models for this. We're going to be able to significantly streamline these workflows and drive a measurable level of efficiency for our clients, so there's definitely going to be value there for them. And I think we're going to be able to share more color in future quarters as we make more progress and we get a little bit further along in the FactSet Explorer beta program. Yeah, so hopefully that gives a little bit more color. Thanks, then, and Christie, I'll add a little bit to what you just said. To answer the second part of your question, Owen, which is, you know, monetization is one that everyone's trying to determine. I think that you'll see, or we'll see, rather, the benefits certainly come through from increased retention. And in fact, it's allowing us to have some very interesting conversations with new clients. So we're going to see how those come through, but it is not baked specifically into certainly the guidance for this year. Got it. Thanks a lot. Welcome. Thank you. One moment for our next question. Our next question comes from the line of Ashish Sabadra from RBC Capital Markets. Thanks for taking my question. Just a question on the six, seven-figure deals which are in the pipeline. Are the closing of those contingent on opening up of the client budgets? And also in the last call, there was a reference around potentially client budgets opening up for calendar year 2024, and I was wondering, based on your-- obviously, we had a lot of conversation on macro, but just based on the client conversation, what are the expectations for client budgets for next year? Any color on that front? Thanks. Hi, thanks for that question. Yeah, you're right. We, as Linda had talked about, we thought a bit of the recovery would improve more quickly into the second half of the year. It's probably a little bit later. And so what we're hearing right now, and clients are sort of finishing up their budgeting process, that most budgets are probably more flat, and what—but they're still being asked to do a lot more with what they have. And as I mentioned before, their ability to scale is still something that's top of mind. So to your point around the 6-7-figure deals, yes, certainly some of that will depend on budgets improving. As mentioned, some of the benefit we have in our open platform is you can do things in pieces, so you don't have to commit to the whole redo of a platform, for example. But certainly, as more dollars are being allocated to technology and Gen AI, we feel we're pretty well positioned to take advantage of that. That's very helpful, Karan. Thanks. Welcome. Thank you. One moment for our next question. Our next question comes from the line of Surinder Thind from Jefferies LLC. Hi, Linda. Just a big picture question here. I guess if I'm interpreting your prepared comments correctly, it seems like you're attributing some of the change in your outlook to kind of the market recovery taking maybe a bit longer than that, than what you guys had anticipated back in September. But I guess, given how much sentiment has improved since that time, or at least in the last 45 days, like, can you help me understand why this is the case? Like, could you not argue that from where we stand today, the outlook from a client perspective should be more positive now than when you initially gave guidance? Like, it seems like there's a bit of a disconnect, and I'm not sure if there's some near-term dynamics here, 'cause I know October was obviously very negative from a sentiment perspective, and then we had a complete reversal. So I'm just not sure if we're seeing the reversal yet, and people are still kind of focused on the October, the sentiment at that point in time. It just seems like there's a bit of a disconnect here. Yeah, it's a perfectly fair question and one that I sort of wrestled with as we were getting ready for this call. So we originally gave guidance on September twenty-first. You will recall that then we had the very tragic events of October seventh, which made the macro situation even more difficult. So we gave guidance before that piece happened, and sentiment, frankly, got worse. We're coming to the calendar year end for a lot of our clients. Budgets got thinner. They tightened their belts yet again. And then last Wednesday, we got what I think everybody considers to be a bit of a surprise from Chairman Powell. You know, I like this expression of he shot the bears. The market has turned dramatically and hard. Is it ahead of itself? It could be, but what I said before is really very important. The hiring and, for some of our clients is a lagging indicator, so we have to work through that, clear that, take the impact of, what's going on with the Credit Suisse situation in our second quarter in a conservative way, and then get back on track, which we are looking to do. And I think, yes, the unusual combination of our fiscal year-end and when some pretty big news events have happened, have caused what you might consider to be a bit of a disconnect, but I hope that the explanation has helped you. So we're, we're quite optimistic, and I'm gonna turn it over to Phil to, to sort of bring us in for a landing here. But, you know, we very much appreciate your point of view and your question and your notes on timing. Probably pretty appropriate, but we are excited about what's coming next, and maybe Phil can comment on that. Yeah. Thanks, Linda. So, yeah, I mean, and the sales cycles for our clients do take some time, particularly for our enterprise solutions. So, I really hope sentiment has turned, and like we spoke about on this call, that it's just a question of timing. So to summarize, you know, we're very excited, obviously, about artificial intelligence. We have a lot of FactSet is out in the market working with our clients, and nothing beats sort of showing the product to the clients and getting that wow, that wow back from them. So we're all really behind this. We've made a lot of progress in the last year, and I feel like we're really in good shape versus the competition, based on what I'm seeing. We did take the guidance down, just because, you know, the turn is taking a bit longer than we thought, which we just spoke to. Second quarter will be a little slower than planned, just to summarize. So but we may be taking a bit of a conservative view there. And we did mention the, in particularly, the Credit Suisse acquisition by UBS, which was well known. And then just to summarize, I'm gonna give a bit of a plug for FactSet Focus. So we're having our flagship user event in Miami this April, and the beginning of May. It's the first time we've done this in a number of years. We're bringing together top thought leaders, industry experts, and key decision-makers, from both the finance and tech sectors. We're really going to be focused very heavily on artificial intelligence and really demonstrating what we've done there. And, you know, hopefully, that will be really engaging for anyone that attends. So that's it. We'll see you all next quarter. Operator, that ends today's call. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.