FactSet Research Systems reported fiscal fourth-quarter and full-year 2026 results before the market opened on September 30, and the stock fell anyway. The adjusted numbers looked clean. The GAAP numbers told a rougher story, and traders picked the rougher one.
What did FactSet report in its Q4 fiscal 2026 earnings?
FactSet posted adjusted diluted EPS of $4.52 against a Street estimate near $4.32, and revenue of $634.7 million, up 6.3% year over year with organic growth of 7.1%. GAAP diluted EPS came in at $3.41, down 15.4% from the prior year. Both figures came from the same quarter, pointing in opposite directions.
FactSet's Q4 FY2026 earnings release filed with the SEC confirms adjusted diluted EPS of $4.52 on revenue of $634.7 million, up 6.3% year over year with 7.1% organic growth, alongside GAAP diluted EPS of $3.41. Organic annual subscription value (ASV) grew $168.2 million year over year to $2,568.2 million, a 7.0% increase, with annual retention holding above 95%. That is the number FactSet's own investor materials lean on to argue the underlying business is healthy: subscription revenue keeps compounding, and clients keep renewing.
Why did FactSet's GAAP EPS fall even as revenue grew?
GAAP operating income fell 6.5% to $699.9 million for the fiscal year, even as adjusted operating income rose 1.4% to $855.3 million. The gap came from higher employee compensation and technology spending, costs that show up in GAAP results and get stripped out of the adjusted figure. Revenue grew. Margin did not follow it.
That's the mechanical story: two cost lines, comp and tech, grew faster than revenue this year. FactSet's fiscal 2026 earnings release shows GAAP operating income fell 6.5% to $699.9 million for the year while adjusted operating income rose 1.4% to $855.3 million, and attributes the gap directly to higher compensation and technology spending. Adjusted EPS excludes amortization of intangibles and other one-time items, which is standard practice across the sector, but it also means the 11.6% year-over-year increase in adjusted EPS and the 15.4% decline in GAAP EPS are both technically accurate descriptions of the same quarter.
Why did FactSet stock drop despite beating estimates?
FactSet shares fell close to 3% on the print, extending losses through the premarket session. The stock traded as low as $252.05 after closing the prior session near $273, opening more than $3.85 below that close. A beat on the number the Street models, adjusted EPS, didn't offset what the GAAP figures showed about cost growth.
FactSet shares fell to a premarket low of $252.05, around 3% below the prior close near $273, even after the company beat the adjusted EPS estimate analysts had modeled. Markets increasingly price the GAAP-to-adjusted gap itself as information: when FactSet's GAAP diluted EPS fell 15.4% in the same quarter adjusted EPS rose 11.6%, that divergence becomes the story analysts ask about on the call, not the adjusted beat itself.
What is FactSet guiding for fiscal 2027?
FactSet guided fiscal 2027 revenue to $2.60 billion to $2.62 billion, GAAP EPS of $17.00 to $17.50, and adjusted EPS of $19.25 to $19.65. That implies continued organic growth in the high single digits and marks FactSet's 47th consecutive year of revenue growth, a streak the company has maintained since going public.
FactSet guided fiscal 2027 revenue to $2.60 billion to $2.62 billion, GAAP EPS of $17.00 to $17.50, and adjusted EPS of $19.25 to $19.65, keeping roughly the same GAAP-adjusted spread seen this quarter. That suggests management expects the comp-and-tech cost pressure to persist into fiscal 2027 rather than ease, and marks the company's 47th consecutive year of revenue growth.
What should traders watch next?
The real test isn't this quarter's beat, it's whether the GAAP-adjusted gap narrows or widens next quarter. A narrowing gap would say the cost growth was a one-time investment cycle. A gap that holds or widens over two more quarters would say FactSet's adjusted-EPS growth is increasingly disconnected from what actually reaches shareholders on a GAAP basis, a distinction that matters more the longer it persists.
FactSet's next quarterly print, expected in December, will show whether the compensation and technology spend that drove this year's GAAP decline was tied to a specific initiative or has become a structural cost of the business. Annual subscription value and retention, both still strong this quarter, are the numbers that matter most if the margin story stays under pressure.
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