QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbols(s) | Name of each exchange on which registered | ||||||
Page | ||||||||
Consolidated Statements of Income for the three and six months ended February 28, 2023 and 2022 | ||||||||
Consolidated Statements of Comprehensive Income for the three and six months ended February 28, 2023 and 2022 | ||||||||
Consolidated Balance Sheets at February 28, 2023 and August 31, 2022 | ||||||||
Consolidated Statements of Cash Flows for the six months ended February 28, 2023 and 2022 | ||||||||
Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended February 28, 2023 and 2022 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating expenses | ||||||||||||||
Cost of services | ||||||||||||||
Selling, general and administrative | ||||||||||||||
Asset impairments | ||||||||||||||
Total operating expenses | ||||||||||||||
Operating income | ||||||||||||||
Other income (expense), net | ||||||||||||||
Interest expense, net | ( | ( | ( | ( | ||||||||||
Other income (expense), net | ( | |||||||||||||
Total other income (expense), net | ( | ( | ( | ( | ||||||||||
Income before income taxes | ||||||||||||||
Provision for income taxes | ||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||
Diluted earnings per common share | $ | $ | $ | $ | ||||||||||
Basic weighted average common shares | ||||||||||||||
Diluted weighted average common shares |
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Net income | $ | $ | $ | $ | ||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||
Net unrealized gain (loss) on cash flow hedges* | ( | |||||||||||||
Foreign currency translation adjustment gains (losses) | ( | ( | ||||||||||||
Other comprehensive income (loss) | ( | |||||||||||||
Comprehensive income | $ | $ | $ | $ |
(in thousands, except share data) | February 28, 2023 | August 31, 2022 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Investments | ||||||||
Accounts receivable, net of reserves of $ | ||||||||
Prepaid taxes | ||||||||
Prepaid expenses and other current assets | ||||||||
Total current assets | ||||||||
Property, equipment and leasehold improvements, net | ||||||||
Goodwill | ||||||||
Intangible assets, net | ||||||||
Deferred taxes | ||||||||
Lease right-of-use assets, net | ||||||||
Other assets | ||||||||
TOTAL ASSETS | $ | $ | ||||||
LIABILITIES | ||||||||
Accounts payable and accrued expenses | $ | $ | ||||||
Current lease liabilities | ||||||||
Accrued compensation | ||||||||
Deferred revenues | ||||||||
Dividends payable | ||||||||
Total current liabilities | ||||||||
Long-term debt | ||||||||
Deferred taxes | ||||||||
Deferred revenues, non-current | ||||||||
Taxes payable | ||||||||
Long-term lease liabilities | ||||||||
Other liabilities | ||||||||
TOTAL LIABILITIES | $ | $ | ||||||
Commitments and contingencies (see Note 12) | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock, $ | $ | $ | ||||||
Common stock, $ | ||||||||
Additional paid-in capital | ||||||||
Treasury stock, at cost: | ( | ( | ||||||
Retained earnings | ||||||||
Accumulated other comprehensive loss | ( | ( | ||||||
TOTAL STOCKHOLDERS’ EQUITY | $ | $ | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Six Months Ended | ||||||||
February 28, | ||||||||
(in thousands) | 2023 | 2022 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Depreciation and amortization | ||||||||
Amortization of lease right-of-use assets | ||||||||
Stock-based compensation expense | ||||||||
Deferred income taxes | ( | ( | ||||||
Asset impairments | ||||||||
Changes in assets and liabilities, net of effects of acquisitions | ||||||||
Accounts receivable, net of reserves | ( | ( | ||||||
Accounts payable and accrued expenses | ||||||||
Accrued compensation | ( | ( | ||||||
Deferred revenues | ||||||||
Taxes payable, net of prepaid taxes | ( | ( | ||||||
Lease liabilities, net | ( | ( | ||||||
Other, net | ( | |||||||
Net cash provided by operating activities | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchases of property, equipment, leasehold improvements and capitalized internal-use software | ( | ( | ||||||
Acquisition of businesses, net of cash and cash equivalents acquired | ( | |||||||
Purchases of investments | ( | ( | ||||||
Net cash provided by (used in) investing activities | ( | ( | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Repayment of debt | ( | |||||||
Dividend payments | ( | ( | ||||||
Proceeds from employee stock plans | ||||||||
Repurchases of common stock | ( | |||||||
Other financing activities | ( | ( | ||||||
Net cash provided by (used in) financing activities | ( | ( | ||||||
Effect of exchange rate changes on cash and cash equivalents | ( | |||||||
Net increase (decrease) in cash and cash equivalents | ( | |||||||
Cash and cash equivalents at beginning of period | ||||||||
Cash and cash equivalents at end of period | $ | $ |
(in thousands, except share data) | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||
Shares | Par Value | Shares | Amount | |||||||||||||||||||||||
Balance as of November 30, 2022 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||
Common stock issued for employee stock plans | ||||||||||||||||||||||||||
Vesting of restricted stock | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | ||||||||||||||||||||||||||
Dividends declared | ( | ( | ||||||||||||||||||||||||
Balance as of February 28, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
For the Six Months Ended February 28, 2023 | ||||||||||||||||||||||||||
(in thousands, except share data) | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||
Shares | Par Value | Shares | Amount | |||||||||||||||||||||||
Balance as of August 31, 2022 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||
Common stock issued for employee stock plans | ( | |||||||||||||||||||||||||
Vesting of restricted stock | ( | ( | ||||||||||||||||||||||||
Stock-based compensation expense | ||||||||||||||||||||||||||
Dividends declared | ( | ( | ||||||||||||||||||||||||
Balance as of February 28, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
(in thousands, except share data) | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |||||||||||||||||||||||
Shares | Par Value | Shares | Amount | ||||||||||||||||||||||||||
Balance as of November 30, 2021 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||||||||
Common stock issued for employee stock plans | ( | ||||||||||||||||||||||||||||
Vesting of restricted stock | — | ( | ( | ||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||
Dividends declared | ( | ( | |||||||||||||||||||||||||||
Balance as of February 28, 2022 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||
For the Six Months Ended February 28, 2022 | |||||||||||||||||||||||||||||
(in thousands, except share data) | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |||||||||||||||||||||||
Shares | Par Value | Shares | Amount | ||||||||||||||||||||||||||
Balance as of August 31, 2021 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||||||||||||||
Common stock issued for employee stock plans | ( | ||||||||||||||||||||||||||||
Vesting of restricted stock | — | ( | ( | ||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | |||||||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||||
Dividends declared | ( | ( | |||||||||||||||||||||||||||
Balance as of February 28, 2022 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||
Page | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Americas | $ | $ | $ | $ | ||||||||||
EMEA | ||||||||||||||
Asia Pacific | ||||||||||||||
Total Revenues | $ | $ | $ | $ |
Fair Value Measurements at February 28, 2023 | |||||||||||
(in thousands) | Level 1 | Level 2 | Total | ||||||||
Assets | |||||||||||
Corporate money market funds(1) | $ | $ | $ | ||||||||
Mutual funds(2) | |||||||||||
Derivative instruments(3) | |||||||||||
Total assets measured at fair value | $ | $ | $ | ||||||||
Liabilities | |||||||||||
Derivative instruments(3) | $ | $ | $ | ||||||||
Total liabilities measured at fair value | $ | $ | $ |
Fair Value Measurements at August 31, 2022 | |||||||||||
(in thousands) | Level 1 | Level 2 | Total | ||||||||
Assets | |||||||||||
Corporate money market funds(1) | $ | $ | $ | ||||||||
Mutual funds(2) | |||||||||||
Derivative instruments(3) | |||||||||||
Total assets measured at fair value | $ | $ | $ | ||||||||
Liabilities | |||||||||||
Derivative instruments(3) | $ | $ | $ | ||||||||
Total liabilities measured at fair value | $ | $ | $ |
February 28, 2023 | August 31, 2022 | ||||||||||||||||
(in thousands) | Fair Value Hierarchy | Principal Amount | Estimated Fair Value | Principal Amount | Estimated Fair Value | ||||||||||||
2027 Notes | Level 1 | $ | $ | $ | $ | ||||||||||||
2032 Notes | Level 1 | ||||||||||||||||
2022 Term Facility | Level 3 | ||||||||||||||||
2022 Revolving Facility | Level 3 | ||||||||||||||||
Total principal amount | $ | $ | $ | $ | |||||||||||||
Total unamortized discounts and debt issuance costs | ( | ( | |||||||||||||||
Total net carrying value of debt | $ | $ | |||||||||||||||
February 28, 2023 | August 31, 2022 | |||||||||||||
(in thousands) | Local Currency | USD | Local Currency | USD | ||||||||||
British Pound Sterling | £ | $ | £ | $ | ||||||||||
Euro | € | € | ||||||||||||
Indian Rupee | Rs | Rs | ||||||||||||
Philippine Peso | ₱ | ₱ | ||||||||||||
Total | $ | $ |
(in thousands) | Gross Notional Value | |||||||
February 28, 2023 | August 31, 2022 | |||||||
Foreign currency forward contracts | $ | $ | ||||||
Interest rate swap agreement | ||||||||
Total cash flow hedges | $ | $ |
Fair Value of Derivative Instruments | ||||||||||||||||||||
(in thousands) | Derivative Assets | Derivative Liabilities | ||||||||||||||||||
Derivatives designated as hedging instruments | Balance Sheet Classification | February 28, 2023 | August 31, 2022 | Balance Sheet Classification | February 28, 2023 | August 31, 2022 | ||||||||||||||
Foreign currency forward contracts | $ | $ | $ | $ | ||||||||||||||||
Interest rate swap agreement | ||||||||||||||||||||
Total cash flow hedges | $ | $ | $ | $ |
Gain (Loss) Recognized in AOCL on Derivatives | Location of Gain (Loss) Reclassified from AOCL into Income | Gain (Loss) Reclassified from AOCL into Income | |||||||||||||||
(in thousands) | February 28, | February 28, | |||||||||||||||
Derivatives in Cash Flow Hedging Relationships | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Foreign currency forward contracts | $ | ( | $ | ( | SG&A | $ | ( | $ | ( | ||||||||
Interest rate swap agreement | Interest expense, net | ( | |||||||||||||||
Total cash flow hedges | $ | $ | $ | $ | ( |
The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the six months ended February 28, 2023 and February 28, 2022, respectively: | |||||||||||||||||
Gain (Loss) Reclassified in AOCL on Derivatives | Location of Gain (Loss) Reclassified from AOCL into Income | Gain (Loss) Reclassified from AOCL into Income | |||||||||||||||
(in thousands) | February 28, | February 28, | |||||||||||||||
Derivatives in Cash Flow Hedging Relationships | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Foreign currency forward contracts | $ | $ | ( | SG&A | $ | ( | $ | ( | |||||||||
Interest rate swap agreement | Interest expense, net | ( | |||||||||||||||
Total cash flow hedges | $ | $ | $ | $ | ( |
Acquisition Date Fair Value | Acquisition Date Useful Life | Amortization Method | |||||||||
(in thousands) | (in years) | ||||||||||
Current assets(1) | $ | ||||||||||
Amortizable intangible assets | |||||||||||
ABA business process | Straight-line | ||||||||||
Client relationships | Straight-line | ||||||||||
Acquired databases | Straight-line | ||||||||||
Goodwill | |||||||||||
Current liabilities(2) | ( | ||||||||||
Deferred revenues, long-term | ( | ||||||||||
Total purchase price | $ |
Acquisition Date Fair Value | Acquisition Date Useful Life | Amortization Method | |||||||||
(in thousands) | (in years) | ||||||||||
Current assets | $ | ||||||||||
Amortizable intangible assets | |||||||||||
Software technology | Straight-line | ||||||||||
Client relationships | Straight-line | ||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Current liabilities | ( | ||||||||||
Other liabilities | ( | ||||||||||
Total purchase price | $ |
(in thousands) | Americas | EMEA | Asia Pacific | Total | ||||||||||
Balance at August 31, 2022 | $ | $ | $ | $ | ||||||||||
Foreign currency translations | ||||||||||||||
Balance at February 28, 2023 | $ | $ | $ | $ |
February 28, 2023 | August 31, 2022 | ||||||||||||||||||||||
(in thousands, except useful lives) | Estimated Useful Life (years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||
ABA business process | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Client relationships | |||||||||||||||||||||||
Software technology | |||||||||||||||||||||||
Developed technology | |||||||||||||||||||||||
Acquired databases | |||||||||||||||||||||||
Data content | |||||||||||||||||||||||
Trade names | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(in thousands) | Estimated Amortization Expense | ||||
Fiscal Years Ended August 31, | |||||
2023 (remaining six months) | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Income before income taxes | $ | $ | $ | $ | ||||||||||
Provision for income taxes | $ | $ | $ | $ | ||||||||||
Effective tax rate | % | % | % | % |
(in thousands) | Minimum Lease Payments | ||||
Fiscal Years Ended August 31, | |||||
2023 (remaining six months) | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ | ||||
Less: Imputed interest | |||||
Present value | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Operating lease cost(1) | $ | $ | $ | $ | ||||||||||
Variable lease cost(2) | $ | $ | $ | $ |
As of February 28, 2023 | As of August 31, 2022 | |||||||
Weighted average remaining lease term (in years) | ||||||||
Weighted average discount rate (IBR) | % | % |
Six Months Ended | ||||||||
February 28, | ||||||||
(in thousands) | 2023 | 2022 | ||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | $ | ||||||
Lease ROU assets obtained in exchange for lease liabilities(1) | $ | $ | ||||||
Reductions to ROU assets resulting from reductions to lease liabilities(2) | $ | $ | ( |
(in thousands) | Issuance Date | Contractual Maturity Date | February 28, 2023 | August 31, 2022 | ||||||||||
2022 Credit Agreement | ||||||||||||||
2022 Term Facility | 3/1/2022 | 3/1/2025 | ||||||||||||
2022 Revolving Facility | 3/1/2022 | 3/1/2027 | ||||||||||||
Senior Notes | ||||||||||||||
2027 Notes | 3/1/2022 | 3/1/2027 | ||||||||||||
2032 Notes | 3/1/2022 | 3/1/2032 | ||||||||||||
Total unamortized discounts and debt issuance costs | ( | ( | ||||||||||||
Total Long-term debt | $ | $ |
(in thousands) | Maturities | ||||
Fiscal Years Ended August 31, | |||||
2023 (remaining six months) | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Interest expense on outstanding debt(1) | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands, except share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Repurchases of common stock under the share repurchase program(1) | ||||||||||||||
Total cost of shares repurchased(1) | $ | $ | $ | $ |
Year Ended | Dividends per Share of Common Stock | Record Date | Total $ Amount (in thousands) | Payment Date | ||||||||||
Fiscal 2023 | ||||||||||||||
First Quarter | $ | November 30, 2022 | $ | December 15, 2022 | ||||||||||
Second Quarter | $ | February 28, 2023 | $ | March 16, 2023 | ||||||||||
Fiscal 2022 | ||||||||||||||
First Quarter | $ | November 30, 2021 | $ | December 16, 2021 | ||||||||||
Second Quarter | $ | February 28, 2022 | $ | March 17, 2022 | ||||||||||
(in thousands) | February 28, 2023 | August 31, 2022 | ||||||
Accumulated unrealized gains (losses) on cash flow hedges, net of tax | $ | $ | ||||||
Accumulated foreign currency translation adjustments | ( | ( | ||||||
Total AOCL | $ | ( | $ | ( |
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Numerator | ||||||||||||||
Net income used for calculating Basic and Diluted EPS | $ | $ | $ | $ | ||||||||||
Denominator | ||||||||||||||
Weighted average common shares used in the calculation of Basic EPS | ||||||||||||||
Common stock equivalents associated with stock-based compensation plan(1) | ||||||||||||||
Shares used in the calculation of Diluted EPS | ||||||||||||||
Basic EPS | $ | $ | $ | $ | ||||||||||
Diluted EPS | $ | $ | $ | $ |
Six Months Ended | ||||||||
February 28, | ||||||||
2023 | 2022 | |||||||
Stock options granted(1) | ||||||||
Weighted average exercise price | $ | $ | ||||||
Weighted average grant date fair value | $ | $ |
November 1, 2022 Annual Employee Grant Details | |||||
Risk-free interest rate | |||||
Expected life (years) | |||||
Expected volatility | |||||
Dividend yield | |||||
Estimated fair value | $ | ||||
Exercise price | $ | ||||
January 17, 2023 Non-Employee Director Grant Details | |||||
Risk-free interest rate | % | ||||
Expected life (years) | |||||
Expected volatility | % | ||||
Dividend yield | % | ||||
Estimated fair value | $ | ||||
Exercise price | $ | ||||
Six Months Ended | ||||||||
February 28, | ||||||||
2023 | 2022 | |||||||
RSUs Granted(1) | ||||||||
PSUs Granted(2) | ||||||||
Total Restricted Stock Awards | ||||||||
Restricted Stock Awards weighted average grant date fair value | $ | $ |
(in thousands) | Americas | EMEA | Asia Pacific | Total | ||||||||||
For the three months ended February 28, 2023 | ||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating income | $ | $ | $ | $ | ||||||||||
Capital expenditures(1) | $ | $ | $ | $ | ||||||||||
(in thousands) | Americas | EMEA | Asia Pacific | Total | ||||||||||
For the three months ended February 28, 2022 | ||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating income(2) | $ | $ | $ | $ | ||||||||||
Capital expenditures(1) | $ | $ | $ | $ | ||||||||||
(in thousands) | ||||||||||||||
For the six months ended February 28, 2023 | Americas | EMEA | Asia Pacific | Total | ||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating income | $ | $ | $ | $ | ||||||||||
Capital expenditures(1) | $ | $ | $ | $ | ||||||||||
(in thousands) | ||||||||||||||
For the six months ended February 28, 2022 | Americas | EMEA | Asia Pacific | Total | ||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating income(2) | $ | $ | $ | $ | ||||||||||
Capital expenditures(1) | $ | $ | $ | $ |
(in thousands) | February 28, 2023 | August 31, 2022 | ||||||
Segment Assets | ||||||||
Americas | $ | $ | ||||||
EMEA | ||||||||
Asia Pacific | ||||||||
Total assets | $ | $ |
(dollar amounts in millions) | As of February 28, 2023 | ||||
As reported ASV plus Professional Services(1) | $ | 2,074.0 | |||
Currency impact(2) | (1.0) | ||||
Acquisition ASV(3) | (171.3) | ||||
Organic ASV plus Professional Services | $ | 1,901.7 | |||
Organic ASV plus Professional Services growth rate | 9.1 | % |
As of February 28, 2023 | As of February 28, 2022 | Change | |||||||||
Clients(1) | 7,730 | 7,172 | 7.8 | % | |||||||
Users | 186,463 | 171,341 | 8.8 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 28, | % Change | February 28, | % Change | |||||||||||||||||
(dollar amounts in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
Revenues | $ | 515,085 | $ | 431,119 | 19.5 | % | $ | 1,019,900 | $ | 855,844 | 19.2 | % | ||||||||
Cost of services | 240,806 | 199,413 | 20.8 | % | $ | 467,848 | $ | 406,544 | 15.1 | % | ||||||||||
Selling, general and administrative | 104,582 | 98,066 | 6.6 | % | $ | 210,178 | $ | 189,304 | 11.0 | % | ||||||||||
Asset impairments | 447 | 10,292 | (95.7) | % | $ | 729 | $ | 13,987 | (94.8) | % | ||||||||||
Operating income | $ | 169,250 | $ | 123,348 | 37.2 | % | $ | 341,145 | $ | 246,009 | 38.7 | % | ||||||||
Net income | $ | 131,593 | $ | 109,938 | 19.7 | % | $ | 268,391 | $ | 217,585 | 23.3 | % | ||||||||
Diluted weighted average common shares | 38,981 | 38,761 | 38,947 | 38,628 | ||||||||||||||||
Diluted earnings per common share | $ | 3.38 | $ | 2.84 | 19.0 | % | $ | 6.89 | $ | 5.63 | 22.4 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 28, | % Change | February 28, | % Change | |||||||||||||||||
(dollar amounts in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
Americas | $ | 331,121 | $ | 273,659 | 21.0 | % | $ | 654,488 | $ | 540,572 | 21.1 | % | ||||||||
% of revenues | 64.3 | % | 63.5 | % | 64.2 | % | 63.2 | % | ||||||||||||
EMEA | $ | 132,508 | $ | 114,591 | 15.6 | % | $ | 263,246 | $ | 229,594 | 14.7 | % | ||||||||
% of revenues | 25.7 | % | 26.6 | % | 25.8 | % | 26.8 | % | ||||||||||||
Asia Pacific | $ | 51,456 | $ | 42,869 | 20.0 | % | $ | 102,166 | $ | 85,678 | 19.2 | % | ||||||||
% of revenues | 10.0 | % | 9.9 | % | 10.0 | % | 10.0 | % | ||||||||||||
Consolidated | $ | 515,085 | $ | 431,119 | 19.5 | % | $ | 1,019,900 | $ | 855,844 | 19.2 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 28, | February 28, | % Change | ||||||||||||||||||
(dollar amounts in thousands) | 2023 | 2022 | % Change | 2023 | 2022 | |||||||||||||||
Cost of services | $ | 240,806 | $ | 199,413 | 20.8 | % | $ | 467,848 | $ | 406,544 | 15.1 | % | ||||||||
SG&A | 104,582 | 98,066 | 6.6 | % | 210,178 | 189,304 | 11.0 | % | ||||||||||||
Asset impairments | 447 | 10,292 | (95.7) | % | 729 | 13,987 | (94.8) | % | ||||||||||||
Total operating expenses | $ | 345,835 | $ | 307,771 | 12.4 | % | $ | 678,755 | $ | 609,835 | 11.3 | % | ||||||||
Operating income | $ | 169,250 | $ | 123,348 | 37.2 | % | $ | 341,145 | $ | 246,009 | 38.7 | % | ||||||||
Operating margin | 32.9 | % | 28.6 | % | 33.4 | % | 28.7 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
February 28, | % Change | February 28, | % Change | ||||||||||||||||||||
(dollar amounts in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Americas | $ | 61,181 | $ | 48,903 | 25.1 | % | $ | 128,712 | $ | 104,401 | 23.3 | % | |||||||||||
EMEA | 68,941 | 45,944 | 50.1 | % | 136,263 | 86,598 | 57.4 | % | |||||||||||||||
Asia Pacific | 39,128 | 28,501 | 37.3 | % | 76,170 | 55,010 | 38.5 | % | |||||||||||||||
Total Operating Income | $ | 169,250 | $ | 123,348 | 37.2 | % | $ | 341,145 | $ | 246,009 | 38.7 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 28, | February 28, | |||||||||||||||||||
(dollar amounts in thousands) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||
Income before income taxes | $ | 156,762 | $ | 121,956 | 28.5 | % | $ | 314,647 | $ | 241,886 | 30.1 | % | ||||||||
Provision for income taxes | $ | 25,169 | $ | 12,018 | 109.4 | % | $ | 46,256 | $ | 24,301 | 90.3 | % | ||||||||
Effective tax rate | 16.1 | % | 9.9 | % | 62.9 | % | 14.7 | % | 10.0 | % | 46.3 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 28, | February 28, | |||||||||||||||||||
(dollar amounts in thousands, except per share data) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||
Net income | $ | 131,593 | $ | 109,938 | 19.7 | % | $ | 268,391 | $ | 217,585 | 23.3 | % | ||||||||
Diluted weighted average common shares | 38,981 | 38,761 | 0.6 | % | 38,947 | 38,628 | 0.8 | % | ||||||||||||
Diluted earnings per common share | $ | 3.38 | $ | 2.84 | 19.0 | % | $ | 6.89 | $ | 5.63 | 22.4 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 28, | % Change | February 28, | % Change | |||||||||||||||||
(dollar amounts in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
Revenues | $ | 515,085 | $ | 431,119 | 19.5 | % | $ | 1,019,900 | $ | 855,844 | 19.2 | % | ||||||||
Deferred revenues fair value adjustment(1) | — | (62) | — | 24 | ||||||||||||||||
Adjusted revenues | $ | 515,085 | $ | 431,057 | 19.5 | % | $ | 1,019,900 | $ | 855,868 | 19.2 | % | ||||||||
Acquired revenues(2) | (47,370) | — | (95,825) | — | ||||||||||||||||
Currency impact(3) | 1,832 | — | 5,332 | — | ||||||||||||||||
Organic revenues | $ | 469,547 | $ | 431,057 | 8.9 | % | $ | 929,407 | $ | 855,868 | 8.6 | % | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 28, | February 28, | |||||||||||||||||||
(dollar amounts in thousands, except per share data) | 2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||||||||||
Operating income | $ | 169,250 | $ | 123,348 | 37.2 | % | $ | 341,145 | $ | 246,009 | 38.7 | % | ||||||||
Deferred revenues fair value adjustment | — | (62) | — | 24 | ||||||||||||||||
Intangible asset amortization | 17,709 | 6,291 | 35,717 | 12,343 | ||||||||||||||||
Business acquisition / integration costs(1) | 3,329 | 5,048 | 6,828 | 5,048 | ||||||||||||||||
Restructuring / severance | 433 | 200 | 433 | 9,228 | ||||||||||||||||
Real estate charges(2) | — | 9,734 | — | 13,429 | ||||||||||||||||
Transformation costs (3) | — | 580 | — | 1,768 | ||||||||||||||||
Adjusted operating income | $ | 190,721 | $ | 145,139 | 31.4 | % | $ | 384,123 | $ | 287,849 | 33.4 | % | ||||||||
Operating margin | 32.9 | % | 28.6 | % | 33.4 | % | 28.7 | % | ||||||||||||
Adjusted operating margin(4) | 37.0 | % | 33.7 | % | 37.7 | % | 33.6 | % | ||||||||||||
Net income | $ | 131,593 | $ | 109,938 | 19.7 | % | $ | 268,391 | $ | 217,585 | 23.3 | % | ||||||||
Deferred revenues fair value adjustment | — | (55) | — | 22 | ||||||||||||||||
Intangible asset amortization | 14,717 | 5,543 | 30,294 | 10,962 | ||||||||||||||||
Business acquisition / integration costs(1) | 2,766 | 4,448 | 5,792 | 4,448 | ||||||||||||||||
Restructuring / severance | 360 | 177 | 360 | 8,261 | ||||||||||||||||
Real estate charges(2) | — | 8,578 | — | 11,887 | ||||||||||||||||
Transformation costs(3) | — | 512 | — | 1,576 | ||||||||||||||||
Income tax items | (1,322) | (2,466) | (1,552) | (2,725) | ||||||||||||||||
Adjusted net income(5) | $ | 148,114 | $ | 126,675 | 16.9 | % | $ | 303,285 | $ | 252,016 | 20.3 | % | ||||||||
Net income | $ | 131,593 | $ | 109,938 | $ | 268,391 | $ | 217,585 | 23.3 | % | ||||||||||
Interest expense | 16,737 | 1,962 | 33,274 | 3,934 | ||||||||||||||||
Income taxes | 25,169 | 12,018 | 46,256 | 24,301 | ||||||||||||||||
Depreciation and amortization expense | 26,211 | 13,395 | 52,208 | 32,827 | ||||||||||||||||
EBITDA | $ | 199,710 | $ | 137,313 | 45.4 | % | $ | 400,129 | $ | 278,647 | 43.6 | % | ||||||||
Real estate charges(2) | — | 9,734 | — | 13,429 | ||||||||||||||||
Adjusted EBITDA | $ | 199,710 | $ | 147,047 | 35.8 | % | $ | 400,129 | $ | 292,076 | 37.0 | % | ||||||||
Diluted earnings per common share | $ | 3.38 | $ | 2.84 | 19.0 | % | $ | 6.89 | $ | 5.63 | 22.4 | % | ||||||||
Deferred revenues fair value adjustment | — | 0.00 | — | 0.00 | ||||||||||||||||
Intangible asset amortization | 0.37 | 0.14 | 0.78 | 0.28 | ||||||||||||||||
Business acquisition / integration costs(1) | 0.07 | 0.11 | 0.15 | 0.12 | ||||||||||||||||
Restructuring / severance | 0.01 | 0.01 | 0.01 | 0.21 | ||||||||||||||||
Real estate charges(2) | — | 0.22 | — | 0.31 | ||||||||||||||||
Transformation costs(3) | — | 0.01 | — | 0.04 | ||||||||||||||||
Income tax items | (0.03) | (0.06) | (0.04) | (0.07) | ||||||||||||||||
Adjusted diluted earnings per common share(5) | $ | 3.80 | $ | 3.27 | 16.2 | % | $ | 7.79 | $ | 6.52 | 19.5 | % | ||||||||
Weighted average common shares (Diluted) | 38,981 | 38,761 | 38,947 | 38,628 |
Six Months Ended | |||||||||||
February 28, | |||||||||||
(dollar amounts in thousands) | 2023 | 2022 | % Change | ||||||||
Net cash provided by operating activities | $ | 271,314 | $ | 194,952 | 39.2 | % | |||||
Net cash provided by (used in) investing activities | (46,305) | (70,814) | (34.6) | % | |||||||
Net cash provided by (used in) financing activities | (285,654) | (26,417) | 981.3 | % | |||||||
Effect of exchange rate changes on cash and cash equivalents | 2,698 | (6,574) | (141.0) | % | |||||||
Net increase (decrease) in cash and cash equivalents | $ | (57,947) | $ | 91,147 | (163.6) | % |
Six Months Ended | |||||||||||
February 28, | |||||||||||
(dollar amounts in thousands) | 2023 | 2022 | Change | ||||||||
Net cash provided by operating activities | $ | 271,314 | $ | 194,952 | $ | 76,362 | |||||
Less: purchases of property, equipment, leasehold improvements and capitalized internal-use software | (35,416) | (20,546) | (14,870) | ||||||||
Free cash flow | $ | 235,898 | $ | 174,406 | $ | 61,492 |
February 28, 2023 | August 31, 2022 | |||||||||||||
(in thousands) | Local Currency | USD | Local Currency | USD | ||||||||||
British Pound Sterling | £ | 46,000 | $ | 55,491 | £ | 44,200 | $ | 55,567 | ||||||
Euro | € | 37,500 | 39,877 | € | 37,500 | 40,679 | ||||||||
Indian Rupee | Rs | 2,987,143 | 36,200 | Rs | 2,667,928 | 33,600 | ||||||||
Philippine Peso | ₱ | 1,767,455 | 31,600 | ₱ | 1,462,060 | 27,000 | ||||||||
Total | $ | 163,168 | $ | 156,846 |
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Foreign currency forward contracts gain (loss) reclassified from AOCL into income | $ | (279) | $ | (1,014) | $ | (5,244) | $ | (1,463) | ||||||
Foreign currency exchange rate fluctuations increase (decrease) to operating income(1) | $ | 7,662 | $ | (1,156) | $ | 16,299 | $ | (5,434) |
Three Months Ended | Six Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||
Foreign currency translation adjustment gains (losses) | $ | 3,070 | $ | (2,983) | $ | 11,839 | $ | (21,696) |
Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Maximum Number of Shares (or Approximate Dollar Value) that May Yet be Purchased Under the Plans or Programs (in US$)(2) | ||||||||||
December 2022 | — | $ | — | — | $ | 181,254 | ||||||||
January 2023 | — | $ | — | — | $ | 181,254 | ||||||||
February 2023 | 1,853 | $ | 426.55 | — | $ | 181,254 | ||||||||
Total | 1,853 | — |
Incorporated by Reference | ||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit No. | Filing Date | Filed Herewith | ||||||||||||||
FactSet Research Systems Inc. Second Amended and Restated Articles of Incorporation | 8-K | 001-11869 | 3.1 | 1/10/2023 | ||||||||||||||||
FactSet Research Systems Inc. Amended and Restated By-Laws | 8-K | 001-11869 | 3.2 | 1/10/2023 | ||||||||||||||||
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended | X | |||||||||||||||||||
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended | X | |||||||||||||||||||
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||
101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document | X | ||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema | X | ||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | X | ||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | X | ||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | X | ||||||||||||||||||
104 | Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X |
FACTSET RESEARCH SYSTEMS INC. (Registrant) | |||||
Date: April 3, 2023 | /s/ LINDA S. HUBER | ||||
Linda S. Huber | |||||
Executive Vice President, Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
/s/ GREGORY T. MOSKOFF | |||||
Gregory T. Moskoff | |||||
Managing Director, Controller and Chief Accounting Officer | |||||
(Principal Accounting Officer) |
Date: April 3, 2023 | |||||
/s/ F. PHILIP SNOW | |||||
F. Philip Snow | |||||
Chief Executive Officer |
Date: April 3, 2023 | |||||
/s/ LINDA S. HUBER | |||||
Linda S. Huber | |||||
Executive Vice President, Chief Financial Officer | |||||
(Principal Financial Officer) |
/s/ F. PHILIP SNOW | |||||
F.Philip Snow | |||||
Chief Executive Officer | |||||
April 3, 2023 |
/s/ LINDA S. HUBER | |||||
Linda S. Huber | |||||
Executive Vice President, Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
April 3, 2023 |
Consolidated Statements of Income - Unaudited - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Income Statement [Abstract] | ||||
Revenues | $ 515,085 | $ 431,119 | $ 1,019,900 | $ 855,844 |
Operating expenses | ||||
Cost of services | 240,806 | 199,413 | 467,848 | 406,544 |
Selling, general and administrative | 104,582 | 98,066 | 210,178 | 189,304 |
Asset impairments | 447 | 10,292 | 729 | 13,987 |
Total operating expenses | 345,835 | 307,771 | 678,755 | 609,835 |
Operating income | 169,250 | 123,348 | 341,145 | 246,009 |
Other income (expense), net | ||||
Interest expense, net | (13,834) | (1,673) | (28,166) | (3,167) |
Other income (expense), net | 1,346 | 281 | 1,668 | (956) |
Total other income (expense), net | (12,488) | (1,392) | (26,498) | (4,123) |
Income before income taxes | 156,762 | 121,956 | 314,647 | 241,886 |
Provision for income taxes | 25,169 | 12,018 | 46,256 | 24,301 |
Net income | $ 131,593 | $ 109,938 | $ 268,391 | $ 217,585 |
Basic earnings per common share (in USD per share) | $ 3.44 | $ 2.91 | $ 7.03 | $ 5.77 |
Diluted earnings per common share (in USD per share) | $ 3.38 | $ 2.84 | $ 6.89 | $ 5.63 |
Basic weighted average common shares (in shares) | 38,281 | 37,837 | 38,201 | 37,685 |
Diluted weighted average common shares (in shares) | 38,981 | 38,761 | 38,947 | 38,628 |
Consolidated Statements of Comprehensive Income - Unaudited - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|||
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 131,593 | $ 109,938 | $ 268,391 | $ 217,585 | ||
Other comprehensive income (loss), net of tax | ||||||
Net unrealized gain (loss) on cash flow hedges | [1] | (2,254) | 4,805 | 4,301 | 4,810 | |
Foreign currency translation adjustment gains (losses) | 3,070 | (2,983) | 11,839 | (21,696) | ||
Other comprehensive income (loss) | 816 | 1,822 | 16,140 | (16,886) | ||
Comprehensive income | $ 132,409 | $ 111,760 | $ 284,531 | $ 200,699 | ||
|
Consolidated Statements of Comprehensive Income - Unaudited (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net unrealized gain (loss) on cash flow hedges, tax (benefit) expense | $ (779) | $ 468 | $ 1,485 | $ 469 |
Consolidated Balance Sheets - Unaudited (Parenthetical) - USD ($) $ in Thousands |
Feb. 28, 2023 |
Aug. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve | $ 3,120 | $ 2,776 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 41,949,883 | 41,653,218 |
Common stock, outstanding (in shares) | 38,313,708 | 38,044,756 |
Treasury stock (in shares) | 3,636,175 | 3,608,462 |
Description of Business |
6 Months Ended |
---|---|
Feb. 28, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS 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 solutions that drive the investment community to see more, think bigger and do its best work. Our strategy is to build the leading open content and analytics platform that delivers a differentiated advantage for our clients’ success. Fiscal 2023 marks the 45th year our platform has delivered expansive data, sophisticated analytics and flexible technology used by global financial professionals to power their critical investment workflows. As of February 28, 2023, we had more than 7,700 clients comprised of approximately 186,000 investment professionals, including asset managers, bankers, wealth managers, asset owners, channel partners, hedge funds, corporate users, private equity and venture capital professionals. Our on- and off-platform solutions span the investment lifecycle including investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected content, referred to as our "content refinery." Our products and services include workstations, portfolio analytics and enterprise solutions. We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas, as well as to analyze, monitor and manage their portfolios. We combine dedicated client service with open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions and application programming interfaces ("APIs"). Our CUSIP Global Services ("CGS") business supports security master files relied on by the investment industry for critical front, middle and back office functions. We drive our business based on our detailed understanding of our clients’ workflows, which helps us to solve their most complex challenges. We provide them with an open digital platform, connected and reliable data, next-generation workflow solutions and highly committed service specialists. We operate our business through three reportable segments ("segments"): the Americas, EMEA and Asia Pacific. Refer to Note 16, Segment Information, for further discussion. For each of our segments, we execute our strategy through three workflow solutions: Research & Advisory; Analytics & Trading; and Content & Technology Solutions ("CTS").
|
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Feb. 28, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation We conduct business globally and manage our business on a geographic basis. The accompanying unaudited Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for annual financial statements; as such, the information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2022. The accompanying unaudited Consolidated Financial Statements include our accounts and those of our wholly-owned subsidiaries; all intercompany activity and balances have been eliminated. In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all normal recurring adjustments, transactions or events discretely impacting the interim periods considered necessary to present fairly our results of operations, financial position, cash flows and equity. Reclassifications In the Consolidated Statements of Income, we reclassified comparative figures for the three and six months ended February 28, 2022 from both Selling, general and administrative and Cost of services to Asset impairments, primarily related to the impairment of our lease right-of-use ("ROU") assets and property, equipment and leasehold improvements, to conform to the current year's presentation. Use of Estimates The preparation of our Consolidated Financial Statements and related disclosures in conformity with GAAP, required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates may have been made in areas that include income taxes, stock-based compensation, goodwill and intangible assets, business combinations, long-lived assets, contingencies and impairment assessments. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. Concentrations of Credit Risks Cash equivalents Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents. We are exposed to credit risk for 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. We have not experienced any losses from maintaining cash accounts in excess of such limits. 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. Accounts Receivable Our accounts receivable credit risk is dependent upon the financial stability of our individual clients; however, this risk is generally limited due to our large and geographically dispersed client base. No single client represented more than 3% of our total subscription revenues in any period presented. The receivable reserve was $3.1 million and $2.8 million as of February 28, 2023 and August 31, 2022, respectively. We do not require collateral from our clients. Derivative Instruments Our use of derivative instruments exposes us to credit risk to the extent counterparties may be unable to meet the terms of their agreements. To mitigate credit risk, we limit counterparties to credit-worthy financial institutions and use several institutions to reduce concentration risk. We do not expect any losses as a result of default by our counterparties. Concentrations of Data Providers We integrate data from various third-party sources into our hosted proprietary data and analytics platform, which our clients access to perform their analyses. As certain data sources have a limited number of suppliers, we make every effort to assure that, where reasonable, alternative sources are available. We are not dependent on any individual third-party data supplier in order to meet the needs of our clients, with only two data suppliers each representing more than 10% of our total data costs for the six months ended February 28, 2023. Recently Adopted Accounting Pronouncements We did not adopt any new standards or updates issued by the Financial Accounting Standards Board ("FASB") during the three and six months ended February 28, 2023 that had a material impact on our Consolidated Financial Statements. Accounting Pronouncements Not Yet Adopted There were no new accounting pronouncements issued or effective as of February 28, 2023 that had, or are expected to have, a material impact on our Consolidated Financial Statements.
|
Revenue Recognition |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | REVENUE RECOGNITION We derive most of our revenues by providing client access to our multi-asset class solutions, powered by our content refinery, over the associated contractual term (referred to as the "Hosted Platform"). The Hosted Platform is a subscription-based service that provides client access to various combinations of products and services including workstations, portfolio analytics and enterprise solutions. In addition, through our CGS platform, we provide subscription access to a database of universally recognized identifiers, enabling differentiating characteristics for issuers and their financial instruments (referred to as the "Identifier Platform"). We determined that the majority of each of our Hosted Platform and Identifier Platform services represents a single performance obligation covering a series of distinct products and services that are substantially the same and that have the same pattern of transfer to the client. We also determined the primary nature of the promise to the client is to provide daily access to each of these data and analytics platforms. These platforms provide integrated financial information, analytical applications and industry-leading service for the investment community. Based on the nature of the services and products offered by these platforms, we apply an output time-based measure of progress as the client is simultaneously receiving and consuming the benefits of the platform. We recognize revenue for the majority of these platforms in accordance with the 'as invoiced' practical expedient as the amount of consideration that we have the right to invoice corresponds directly with the value of our performance to date. We do not consider payment terms as a performance obligation for clients with contractual terms that are one year or less and we have elected the practical expedient. Contracts with clients can include certain fulfillment costs, comprised of up-front costs to allow for the delivery of products and services, which are recoverable. Fulfillment costs are recognized as an asset, with the current portion recorded in Prepaid expenses and other current assets and the non-current portion recorded in Other assets in the Consolidated Balance Sheets, based on the term of the license period. The fulfillment costs are amortized consistent with the associated revenues for providing the services. There are no significant judgments that would impact the timing of revenue recognition. The majority of client contracts have a duration of one year or the amount we are entitled to receive corresponds directly with the value of performance obligations completed to date, and therefore, we do not disclose the value of the remaining unsatisfied performance obligations. Disaggregated Revenues We disaggregate revenues from contracts with clients by our segments which consist of the Americas, EMEA and Asia Pacific. We believe these segments are reflective of how we manage our business and the markets in which we serve and best depict the nature, amount, timing and uncertainty of revenues and cash flows related to contracts with clients. Segment revenues reflect sales to our clients based on their respective geographic locations. Refer to Note 16, Segment Information, for further information. The following table presents this disaggregation by segment:
|
Fair Value Measures |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measures | FAIR VALUE MEASURES Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the use of various valuation methodologies, including market, income and cost approaches, is permissible. We consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability. Fair Value Hierarchy The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels. We have categorized our cash equivalents, investments and derivatives within the fair value hierarchy as follows: Level 1 – applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 – applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 – applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. (a) Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables show, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis as of February 28, 2023 and August 31, 2022. We did not have any transfers between levels of fair value measurements during the periods presented below. We held no Level 3 assets or liabilities measured at fair value on a recurring basis as of February 28, 2023 and August 31, 2022.
(1) Our corporate money market funds are readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine its fair value. Our corporate money market funds are included in Cash and cash equivalents within the Consolidated Balance Sheets. (2) Our mutual funds' fair value is based on the fair value of the underlying investments held by the mutual funds, allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments is based on observable inputs. Our mutual funds are included in Investments (short-term) within the Consolidated Balance Sheets. (3) Our derivative instruments include our foreign exchange forward contracts and interest rate swap agreements. We utilize the income approach to measure fair value for our foreign exchange forward contracts. The income approach uses pricing models that rely on market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads. To estimate fair value for our interest rate swap agreements, we utilize a present value of future cash flows, leveraging a model-derived valuation that uses observable inputs such as interest rate yield curves. Refer to Note 5, Derivative Instruments, for more information on our derivative instruments and their classification within the Consolidated Balance Sheets. (b) Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis Assets and liabilities that are measured at fair value on a non-recurring basis relate primarily to our tangible fixed assets, lease ROU assets, goodwill and intangible assets. The fair values of these non-financial assets and liabilities are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable information and discounted cash flow projections. These non-financial assets are required to be assessed for impairment whenever events or circumstances indicate their carrying value may not be fully recoverable, and at least annually for goodwill. Asset impairments incurred during the three and six months ended February 28, 2022 were $10.3 million and $14.0 million, respectively, with no similar level of impairment recorded during the three and six ended February 28, 2023. The asset impairments recognized during the three and six months ended February 28, 2022 included a respective $9.7 million and $13.4 million charge related to our lease ROU assets and property, equipment and leasehold improvements associated with vacating certain leased office space. 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. To complete this assessment we relied on certain assumptions, which included estimates of the rental rate, period of vacancy, incentives and annual rent increases. We fully impaired the lease ROU assets for locations we will not sublease and substantially all the property, equipment and leasehold improvements associated with the related vacated leased office space as there are no expected cash flows related to these items. Due to the subjective nature of the unobservable inputs used, the fair value measurement for the asset impairments are classified within Level 3 of the fair value hierarchy. (c) Assets and Liabilities Measured at Fair Value for Disclosure Purposes Only We elected not to carry our Long-term debt at fair value. The carrying value of our Long-term debt is net of related unamortized discount and debt issuance costs. The fair value of our Senior Notes is estimated based on quoted prices in active markets as of the reporting date, given that the Senior Notes are publicly traded, which are considered Level 1 inputs. The fair value of our 2022 Credit Facilities is estimated based on quoted market prices for similar instruments, adjusted for unobservable inputs to ensure comparability to our investment rating, maturity terms and principal outstanding, which are considered Level 3 inputs. Refer to Note 11, Debt for definitions of these terms and more information on the Senior Notes and 2022 Credit Facilities. The following table summarizes information on our outstanding debt as of February 28, 2023 and August 31, 2022:
|
Derivative Instruments |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | DERIVATIVE INSTRUMENTS Cash Flow Hedges In designing our hedging approach, we consider several factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge to reduce the volatility of our earnings and cash flows. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness and cost of derivative instruments. Derivative instruments are only utilized for risk management purposes and are not used for speculative or trading purposes. We limit counterparties to credit-worthy financial institutions. Refer to Note 2, Summary of Significant Accounting Policies - Concentrations of Credit Risk, for further discussion on counterparty credit risk. We leverage foreign currency forward contracts and interest rate swaps to mitigate certain operational exposures from the impact of changes in foreign currency exchange rates and to manage our interest rate exposure. We have designated and accounted for these derivatives as cash flow hedges with the unrealized gains or losses recorded in Accumulated Other Comprehensive Loss ("AOCL"), net of tax, in the Consolidated Balance Sheets. Realized gains or losses resulting from settlement of our forward contracts and swap agreements are subsequently reclassified into Selling, general and administrative ("SG&A") and Interest expense, net, respectively, in the Consolidated Statements of Income when the hedges are settled. Foreign Currency Forward Contracts As we conduct business outside the U.S. in several currencies, we are exposed to movements in foreign currency exchange rates. The gains and losses on foreign currency forward contracts offset the variability in operating expenses associated with currency movements. As of February 28, 2023, we maintained a series of foreign currency forward contracts to hedge a portion of our exposures related to our primary currencies of the British Pound Sterling, Indian Rupee, Euro and Philippine Peso. We entered into these contracts to mitigate our currency exposure ranging from 25% to 75%, over their respective hedged periods, which are set to mature at various points between the third quarter of fiscal 2023 through the second quarter of fiscal 2024. The following table summarizes the gross notional value of foreign currency forward contracts to purchase British Pound Sterling, Euros, Indian Rupees and Philippine Pesos with U.S. dollars as of February 28, 2023 and August 31, 2022.
Refer to Foreign Currency Transaction Risk in Item 3. Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q for further discussion of our exposure to foreign exchange rate fluctuations. Interest Rate Swap Agreements 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 Secured Overnight Financing Rate ("SOFR") rate debt with a fixed interest rate of 1.162%. The notional amount of the 2022 Swap Agreement declines by $100.0 million on a quarterly basis as of May 31, 2022 and is maturing on February 28, 2024. Effective December 30, 2022, we partially novated our 2022 Swap Agreement to equally apportion the then outstanding notional amount of the interest rate swap between two counterparties. No other terms of the 2022 Swap Agreement were amended, terminated, or otherwise modified. As of February 28, 2023, the notional amount of the 2022 Swap Agreement was $400.0 million. 2020 Swap Agreement On March 5, 2020, we entered into an interest rate swap agreement ("2020 Swap Agreement") with a notional amount of $287.5 million. The 2020 Swap Agreement hedged a portion of our then outstanding floating LIBOR rate debt with a fixed interest rate of 0.7995% to mitigate our interest rate exposure. On March 1, 2022, we terminated the 2020 Swap Agreement, which resulted in a one-time benefit of $3.5 million recognized in Interest expense, net in the Consolidated Statements of Income during the third quarter of fiscal 2022, based on its fair market value. Refer to Note 11, Debt, for further discussion of our outstanding floating SOFR rate debt. Refer to Interest Rate Risk in Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q for further discussion of our exposure to interest rate risk on our long-term debt outstanding. Gross Notional Value and Fair Value of Derivative Instruments The following is a summary of the gross notional values of the derivative instruments:
The following is a summary of the fair values of our derivative instruments:
All derivatives were designated as hedging instruments as of February 28, 2023 and August 31, 2022. Derivative Recognition The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended February 28, 2023 and February 28, 2022, respectively:
As of February 28, 2023, we estimate that net pre-tax derivative gains of $9.9 million included in AOCL will be reclassified into earnings within the next 12 months. As of February 28, 2023, our cash flow hedges were highly effective with no amount of ineffectiveness recorded in the Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. There was no discontinuance of our cash flow hedges during the six months ended February 28, 2023 or February 28, 2022, and as such, no corresponding gains or losses related to changes in the value of our contracts were reclassified into earnings prior to settlement. Offsetting of Derivative Instruments We enter into master netting arrangements designed to permit net settlement of derivative transactions among the respective counterparties, settled on the same date and in the same currency. As of February 28, 2023 and August 31, 2022, there were no material amounts recorded net on the Consolidated Balance Sheets.
|
Acquisitions |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | ACQUISITIONS During fiscal 2022, we completed acquisitions of CUSIP Global Services ("CGS") and Cobalt Software, Inc. ("Cobalt"). 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 American Bankers Association ("ABA"), is the provider of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers globally and also acts as the official numbering agency for International Securities Identification Number ("ISIN") identifiers in the United States and as a substitute number agency for more than 35 other countries. We believe that the CGS acquisition will significantly expand our critical role in the global capital markets. The CGS purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We finalized the purchase accounting for the CGS acquisition during the fourth quarter of fiscal 2022 and did not record any material changes to the preliminary purchase price allocation. The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:
(1) Includes an accounts receivable balance of $29.5 million. (2) Includes a deferred revenues balance of $99.4 million. The CGS acquisition was accounted for in accordance with our adoption of ASU No. 2021-08; as such, the deferred revenues did not include a fair value adjustment. Refer to Note 2, Significant Accounting Policies in the Notes included in Item 8. of our Annual Report on Form 10-K for the fiscal year ended August 31, 2022 for more information on ASU No. 2021-08. Goodwill totaling $215.0 million represents the excess of the CGS purchase price over the fair value of net assets acquired and considers future economic benefits that we expect to achieve as a result of the acquisition. The goodwill is included in the Americas segment and is deductible for income tax purposes. The majority of the net assets acquired relate to an ABA business process intangible which is a renewable license agreement with the ABA to manage the issuance, maintenance and access to the CUSIP numbering system and related database of CUSIP identifiers. This intangible asset's valuation and associated useful life considers the nature of the business relationship, multi-year term of the current agreement and the likelihood of long-term renewals. The useful life assigned to the Client relationships intangible asset considers the strong historical client retention and client renewals as a basis for expected future retention. The useful life assigned to Acquired databases considers the historical period of data collection and the limited changes to the data on an annual basis. The results of CGS's operations have been included in our Consolidated Financial Statements, within the Americas, EMEA and Asia Pacific segments, beginning with the closing of the acquisition on March 1, 2022. CGS functions as part of CTS. Pro forma information has not been presented because the effect of the CGS acquisition was not material to our Consolidated Financial Statements. 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 solutions provider for the private capital industry. This acquisition aligned with our strategy to scale our data and workflow solutions through targeted investments as part of our multi-year investment plan and expands our private markets offering. The Cobalt purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We finalized the purchase accounting for the Cobalt acquisition during the fourth quarter of fiscal 2022 and did not record any material changes to the preliminary purchase price allocation. The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:
Goodwill totaling $41.3 million represents the excess of the Cobalt purchase price over the fair value of net assets acquired and is included in the Americas and EMEA segments. Goodwill generated from the Cobalt acquisition is not deductible for income tax purposes. The useful life assigned to the Client relationships intangible asset considers the historical client retention as a basis for expected future retention. The useful life assigned to Software technology considers our historical experience and anticipated technological changes. The results of Cobalt's operations have been included in our Consolidated Financial Statements, within the Americas and EMEA segments, beginning with its acquisition on October 12, 2021. Pro forma information has not been presented because the effect of the Cobalt acquisition was not material to our Consolidated Financial Statements.
|
Goodwill |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | GOODWILL Changes in the carrying amount of goodwill by segment for the six months ended February 28, 2023 are as follows:
|
Intangible Assets |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | INTANGIBLE ASSETS We amortize intangible assets on a straight line basis over their estimated useful lives. The estimated useful life, gross carrying amounts and accumulated amortization totals related to our identifiable intangible assets are as follows:
The weighted average useful life of our intangible assets at February 28, 2023 was 32.8 years. As described in Note 6, Acquisitions, we acquired several intangible assets as part of the CGS acquisition. The weighted average useful life of our intangible assets at February 28, 2023, excluding those acquired from CGS, was 9.3 years. We assess intangible assets for indicators of impairment on a quarterly basis, including an evaluation of our useful lives to determine if events and circumstances warrant a revision to the remaining period of amortization. If indicators of impairment are present, amortizable 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. We have not identified a material impairment nor a material change to the estimated remaining useful lives of our intangible assets for the six months ended February 28, 2023 and February 28, 2022. The intangible assets have no assigned residual values. Amortization expense recorded for intangible assets for the three months ended February 28, 2023 and February 28, 2022 was $21.7 million and $9.1 million, respectively. Amortization expense for intangible assets for the six months ended February 28, 2023 and February 28, 2022 was $43.4 million and $19.2 million, respectively. As of February 28, 2023, estimated intangible asset amortization expense for each of the next five years and thereafter are as follows:
|
Income Taxes |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXESIncome tax expense is based on taxable income determined in accordance with current enacted laws and tax rates. Deferred income taxes are recorded for the temporary differences between the financial statement and the tax bases of assets and liabilities using currently enacted tax rates. Income Tax Provision and Effective Tax Rate The provision for income taxes and effective tax rate are as follows:
We are subject to taxation in the United States and various foreign jurisdictions in which we conduct our business. Our provision for income taxes for interim periods is calculated by applying an estimate of our annual effective tax rate to our quarter and year-to-date results, adjusted for discrete items recorded in the period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pretax income (or loss) for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets, then adjusted for any discrete items. On a quarterly basis, we update the estimate of our annual effective tax rate as new events occur, assumptions change, or additional information is obtained. For the three months ended February 28, 2023, the effective tax rate was 16.1% compared to 9.9% for the same period a year ago. For the six months ended February 28, 2023, the effective tax rate was 14.7% compared to 10.0% for the same period a year ago. For all periods presented, our effective tax rate was lower than the applicable U.S. corporate income tax rate, mainly due to research and development ("R&D") tax credits, a foreign derived intangible income ("FDII") deduction, and a tax benefit from the exercise of stock options. Our effective tax rate during the three and six months ended February 28, 2023 was higher than the rate during the respective prior year periods, due mainly to a decrease in the impact of tax attributes on the effective tax rate as a result of an increase in income, a lower tax benefit from the exercise of stock options and an increase in the U.K.'s enacted tax rates. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act ("IRA") was signed into law. The IRA contains several revisions to the Internal Revenue Code effective for taxable years beginning after December 31, 2022, including a 15% minimum income tax on certain large corporations. The IRA also includes a 1% excise tax on corporate stock repurchases made by publicly traded U.S. corporations after December 31, 2022. We do not expect the IRA to have a material impact on our Consolidated Financial Statements.
|
Leases |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES Our lease portfolio is primarily related to our office space, under various operating lease agreements. We review new arrangements at inception to evaluate whether we obtain substantially all the economic benefits of and have the right to control the use of an asset. Our lease ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments at lease commencement (which includes fixed lease payments and certain qualifying index-based variable payments) over the reasonably certain lease term, leveraging an estimated IBR. Certain adjustments to calculate our lease ROU assets may be required due to prepayments, lease incentives received and initial direct costs incurred. We account for the lease and non-lease components as a single lease component, which we recognize over the expected term on a straight-line expense basis in occupancy costs (a component of SG&A expense) in our Consolidated Statements of Income. As of February 28, 2023, we recognized $150.2 million of Lease right-of-use assets, net and $225.2 million of combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets. Such leases have a remaining lease term ranging from less than one year to just under 13 years and did not include any renewal or termination options that were not yet reasonably certain to be exercised. The following table reconciles our future undiscounted cash flows related to our operating leases and the reconciliation to the combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets as of February 28, 2023:
The following table includes the components of our occupancy costs in our Consolidated Statements of Income:
(1) Operating lease costs include costs associated with fixed lease payments and index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions elected by us. (2) Variable lease costs include costs that were not fixed at the lease commencement date and are not dependent on an index or rate. These costs were not included in the measurement of lease liabilities and primarily include variable non-lease costs, such as utilities, real estate taxes, insurance and maintenance, as well as lease costs for those leases that qualified for the short-term lease exception. The following table summarizes our lease term and discount rate assumptions related to the operating leases recorded on the Consolidated Balance Sheets:
The following table summarizes supplemental cash flow information related to our operating leases:
(1)Primarily includes new lease arrangements entered into during the period and contract modifications that extend our lease terms and/or provide additional rights. (2)Primarily relates to lease term reassessments based on contractual options to early terminate, resulting in a reduction to the lease liability and the corresponding lease ROU asset. During the three and six months ended February 28, 2022, we incurred an impairment charge of $5.8 million and $7.2 million, respectively, related to our lease ROU assets associated with vacating certain leased office space. Refer to Note 4, Fair Value Measures for more information on the lease ROU assets impairment methodology. The were no similar lease ROU asset impairments recorded during the three and six months ended February 28, 2023.
|
Debt |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT We elected not to carry our Long-term debt at fair value. The carrying value of our debt is net of related unamortized discount and debt issuance costs. Our total debt obligations as of February 28, 2023 and August 31, 2022 consisted of the following:
As of February 28, 2023, annual maturities on our total debt obligations, based on contract maturity, were as follows:
2022 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 under the 2022 Revolving Facility from lenders or other financial institutions up to an aggregate principal amount of $750.0 million. 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. The commitment fee remained consistent at 0.125% from the borrowing date through February 28, 2023. We used these borrowings, along with the net proceeds from the issuance of the Senior Notes (as defined below) and cash on hand, to finance the consideration for the CGS acquisition, to repay borrowings under the 2019 Credit Agreement (as defined below) and to pay related transaction fees, costs and expenses. During fiscal 2022, we incurred approximately $9.5 million in debt issuance costs related to the 2022 Credit Facilities. Debt issuance costs are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability. Debt issuance costs are amortized to Interest expense, net in the Consolidated Statements of Income on a straight-line basis over the contractual term of the debt, which approximates the effective interest method. We may voluntarily prepay loans under the 2022 Credit Facilities at any time without premium or penalty. During the three and six months ended February 28, 2023, we repaid $125.0 million and $250.0 million, respectively, under the 2022 Term Facility, inclusive of voluntary prepayments of $112.5 million and $225.0 million, respectively. Since loan inception on March 1, 2022, we have repaid $500.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $462.5 million. As of February 28, 2023, the outstanding borrowings under the 2022 Credit Facilities bore interest at a rate equal to the applicable one-month Term SOFR rate 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). The spread remained consistent from the borrowing date through February 28, 2023. Interest on the 2022 Credit Facilities is currently payable on the last business day of each month, in arrears. The 2022 Credit Agreement contains usual and customary event of default provisions for facilities of this type, which are subject to usual and customary grace periods and materiality thresholds. If an event of default occurs under the 2022 Credit Agreement, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings immediately due and payable. 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 4.00 to 1.00 as of February 28, 2023. We were in compliance with all covenants and requirements of the 2022 Credit Agreement as of February 28, 2023. Swap Agreements On March 5, 2020, we entered into the 2020 Swap Agreement to hedge a portion of our then outstanding floating LIBOR rate debt with a fixed interest rate of 0.7995%. On March 1, 2022, we terminated the 2020 Swap Agreement and concurrently entered into the 2022 Swap Agreement to hedge a portion of our outstanding floating SOFR rate debt with a fixed interest rate of 1.162%. Effective December 30, 2022, we apportioned the then outstanding notional amount of the 2022 Swap Agreement between two counterparties. Refer to Note 5, Derivative Instruments for further discussion of the 2020 Swap Agreement and 2022 Swap Agreement. Senior Notes On March 1, 2022 we completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due March 1, 2027 (the “2027 Notes”) and $500.0 million aggregate principal amount of 3.450% Senior Notes due March 1, 2032 (the “2032 Notes” and, together with the 2027 Notes, the “Senior Notes”). The Senior Notes were issued pursuant to an indenture, dated as of March 1, 2022, by and between us and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as supplemented by the supplemental indenture, dated as of March 1, 2022, between us and the Trustee (the "Supplemental Indenture"). The Senior Notes were issued at an aggregate discount of $2.8 million during fiscal 2022 and we incurred approximately $9.1 million in debt issuance costs. 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, net 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, with the first payment made on September 1, 2022. We may redeem the Senior Notes, in whole or in part, at any time at specified redemption prices, plus any accrued and unpaid interest. Upon the occurrence of a change of control triggering event (as defined in the Supplemental Indenture), we must offer to repurchase the Senior Notes at 101% of their principal amount, plus any accrued and unpaid interest. 2019 Credit Agreement On March 29, 2019, we entered into a credit agreement with PNC Bank, National Association (the "2019 Credit Agreement") and borrowed $575.0 million of the available $750.0 million provided by the revolving credit facility thereunder (the "2019 Revolving Credit Facility"). Borrowings under the 2019 Revolving Credit Facility bore interest on the outstanding principal amount at a rate equal to the daily LIBOR plus a spread using a debt leverage pricing grid. Interest on the amounts outstanding under the 2019 Revolving Credit Facility was payable quarterly, in arrears, and on the maturity date. We incurred approximately $0.9 million in debt issuance costs related to the 2019 Credit Agreement. On March 1, 2022, we terminated the 2019 Credit Agreement and amortized the remaining related $0.4 million of capitalized debt issuance costs into Interest expense, net in the Consolidated Statements of Income. Interest Expense On March 1, 2022, the 2019 Revolving Credit Facility and 2020 Swap Agreement were both terminated and concurrently replaced with the 2022 Credit Facilities, Senior Notes and 2022 Swap Agreement. The following table presents the interest expense on our outstanding debt which is included in Interest expense, net in our Consolidated Statements of Income:
(1) Interest expense on our outstanding debt includes the related amortization of debt issuance costs and debt discounts, net of the effects of the related interest rate swap agreements. Including the related amortization of debt issuance costs and debt discounts, net of the effects of the related interest rate swap agreement, the year-to-date weighted average interest rate on amounts outstanding under our outstanding debt was 3.26% and 2.02% as of February 28, 2023 and August 31, 2022, respectively. Refer to Note 5, Derivative Instruments for further discussion of the 2020 Swap Agreement and 2022 Swap Agreement.
|
Commitments and Contingencies |
6 Months Ended |
---|---|
Feb. 28, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Commitments represent obligations, such as those for future purchases of goods or services, that are not yet recorded on the balance sheet as liabilities. We record liabilities for commitments when incurred (i.e., when the goods or services are received). We accrue non-income-tax liabilities for contingencies when we believe that a loss is probable, and the amount can be reasonably estimated. Judgment is required to determine both probability and the estimated amount of loss. If the reasonable estimate of a probable loss is a range, we record 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 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. Contingent gains are recognized only when realized. Uncertain income tax positions are accounted for in accordance with applicable accounting guidance, refer to Note 9, Income Taxes in the Notes included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended August 31, 2022 for further details. Purchase Commitments with Suppliers and Vendors Purchase obligations represent our legally-binding agreements to purchase fixed or minimum quantities at determinable prices. Our total purchase obligations as of August 31, 2022 primarily related to hosting services and acquisition of data, and, to a lesser extent, third-party software providers. Hosting services support our technology investments related to our transition to a hybrid cloud strategy, the majority of which rely on third-party hosting providers. Data is an integral component of the value we provide to our clients and our commitments to third-party software providers mainly include internal-use software licenses. As of August 31, 2022, we had total purchase obligations with suppliers of $373.9 million. During the second quarter of fiscal 2023, we amended a contract with a data supplier that resulted in an incremental commitment to purchase data of approximately $26 million. We also have contractual obligations related to our lease liabilities and outstanding debt. Refer to Note 10, Leases and Note 11, Debt for information regarding lease commitments and outstanding debt obligations, respectively. Capital Commitments As of February 28, 2023 and August 31, 2022, we had outstanding capital commitments related to an investment of $0.8 million and $1.1 million, respectively. Letters of Credit From time to time, we are required to obtain letters of credit in the ordinary course of business. As of both February 28, 2023 and August 31, 2022, we had $0.5 million of standby letters of credit outstanding. No liabilities related to these arrangements are reflected in the Company's Consolidated Balance Sheets. Contingencies Legal Matters We are engaged in various legal proceedings, claims and litigation that have arisen in the ordinary course of business. The outcome of all the matters against us are subject to future resolution, including the uncertainties of litigation. Based on information available at February 28, 2023, our management believes that the ultimate outcome of these unresolved matters against us, individually or in the aggregate, will not have a material adverse effect on our consolidated financial position, our results of operations or our cash flows. Income Taxes We are currently under audit by tax authorities and have reserved for potential adjustments to our provision for income taxes that may result from examinations by, or any negotiated settlements with, these tax authorities. We believe that the final outcome of these examinations or settlements will not have a material effect on our results of operations nor our cash flows. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of tax benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state and foreign income tax liabilities are less than the ultimate assessment, additional expense would result. Sales Tax Matters On August 8, 2019, we received a Notice of Intent to Assess (the "First Notice") additional sales taxes, interest and underpayment penalties (the “Sales Taxes”) from the Commonwealth of Massachusetts Department of Revenue (the "Commonwealth") relating to the tax periods from January 1, 2006 through December 31, 2013. On July 20, 2021, we received a Notice of Intent to Assess (the "Second Notice") additional Sales Taxes from the Commonwealth relating to the tax periods from January 1, 2014 through December 31, 2018. On December 29, 2022, we received a Notice of Intent to Assess (the “Third Notice"; cumulatively with the First and Second Notices, the “Notices”) additional Sales Taxes from the Commonwealth relating to the tax periods from January 1, 2019 through June 30, 2021. We have filed an appeal with respect to the Notices to contest all Sales Taxes that may be assessed. We continue to cooperate with the Commonwealth's inquiry with respect to the Notices. We have concluded that a payment to the Commonwealth is probable. We have recorded an accrual which is not material to our consolidated financial statements. While we believe that the assumptions and estimates used to determine the accrual are reasonable, future developments could result in adjustments being made to this accrual. If we are presented with a formal assessment for any of these matters, we believe that we will ultimately prevail; however, if we do not prevail, the amount of any assessment could have a material impact on our consolidated financial position, results of operations and cash flows. Indemnifications As permitted or required under Delaware law and to the maximum extent allowable under that law, we have certain obligations to indemnify each of our current and former officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of FactSet, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. It is not possible to determine the maximum potential amount for claims made under the indemnification obligations due to the unique set of facts and circumstances likely to be involved in each particular claim and indemnification provision; however, we have purchased a director and officer insurance policy that mitigates our exposure and may enable us to recover a portion of any future amounts paid. We do not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under such indemnification obligations.
|
Stockholders' Equity |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | STOCKHOLDERS' EQUITY Share Repurchases
(1) Amounts do not include 1,853 shares and 675 shares surrendered by grantees to satisfy withholding tax obligations due upon the vesting or exercise of stock-based awards valued at $0.8 million and $0.3 million during the three months ended February 28, 2023 and February 28, 2022, respectively. Amounts do not include 27,713 shares and 7,422 shares surrendered by grantees to satisfy withholding tax obligations due upon the vesting or exercise of stock-based awards valued at $11.8 million and $3.3 million during the six months ended February 28, 2023 and February 28, 2022, respectively. We did not repurchase any shares of our common stock during the three months ended February 28, 2023 and February 28, 2022. We also did not repurchase any shares during the six months ended February 28, 2023 compared with 46,200 shares repurchased for $18.6 million during the same period in the prior fiscal year. Beginning in the second quarter of fiscal 2022, we suspended our share repurchase program until at least the second half of fiscal 2023, with the exception of potential minor repurchases to offset dilution from grants of equity awards or repurchases to satisfy withholding tax obligations due upon the vesting of stock-based awards. The suspension of our share repurchase program allowed us to prioritize the repayment of debt under the 2022 Credit Facilities. We anticipate resuming the existing share repurchase program for the third and fourth quarters of fiscal 2023. Refer to Note 11, Debt for more information on the 2022 Credit Facilities. As of February 28, 2023, a total of $181.3 million remained authorized for future share repurchases under this program. There is no defined number of shares to be repurchased over a specified timeframe through the life of the share repurchase program. We may repurchase shares of our common stock under the program from time-to-time in the open market and privately negotiated transactions, subject to market conditions. Equity-based Awards Refer to Note 15, Stock-Based Compensation for more information on equity awards issued during the three and six months ended February 28, 2023 and February 28, 2022. Dividends Our Board of Directors declared dividends during the three and six months ended February 28, 2023 and February 28, 2022 as follows:
In the third quarter of fiscal 2022, our Board of Directors approved an 8.5% increase in the regular quarterly dividend from $0.82 to $0.89 per share. Future cash dividend payments will depend on our earnings, capital requirements, financial condition and other factors considered relevant by us and are subject to final determination by our Board of Directors. Accumulated Other Comprehensive Loss The components of AOCL are as follows:
|
Earnings Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share ("Basic EPS") is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted earnings per share ("Diluted EPS") is computed using the treasury stock method, by dividing net income by the cumulative weighted average common shares that are outstanding or are issuable upon the exercise of outstanding stock-based compensation awards during the period. Stock-based compensation awards that are out-of-the-money and performance share units ("PSUs") in which the performance criteria have not been met as of the end of the respective reporting period are omitted from the calculation of Diluted EPS. A reconciliation of the weighted average shares outstanding used in the Basic and Diluted EPS computation is as follows: (1)Dilutive potential common shares consist of stock options and unvested PSUs. As of February 28, 2023 we excluded 543,082 common stock equivalents related to stock options and as of February 28, 2022, we did not exclude any common stock equivalents related to stock options from our calculation of Diluted EPS. As of February 28, 2023 and February 28, 2022, we excluded a respective 93,308 and 95,865 common stock equivalents related to PSUs from our calculation of Diluted EPS.
|
Stock Based Compensation |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation | STOCK-BASED COMPENSATION We measure compensation expense based on the grant date fair value for all stock-based awards made to our employees and to our non-employee directors ("non-employees") using the Black-Scholes model or the lattice-binomial option-pricing model ("binomial model"). We utilize the Black-Scholes model for grants of non-employee stock options and non-employee restricted stock units ("RSUs"), and common stock acquired under the FactSet Research Systems Inc. Employee Stock Purchase Plan, as Amended and Restated ("ESPP"). We use the binomial model for grants of employee stock options and employee RSUs and PSUs. We refer to RSUs and PSUs, collectively, as "Restricted Stock Awards." Both models 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. Additionally, the binomial model incorporates market conditions, vesting restrictions and exercise patterns. For Restricted Stock Awards, the grant date fair value is measured by reducing the grant date price of our common stock by the present value of the dividends expected to be paid on the underlying stock during the requisite service period, discounted at the appropriate risk-free interest rate. For stock-based awards, we use the straight-line method to recognize compensation expense over the requisite service period. The amount of compensation expense that is recognized on any date is at least equal to the vested portion of the award on that date. Compensation expense for PSUs is recognized if the achievement of the performance condition is determined to be probable. We review the PSU performance conditions quarterly to ensure the compensation expense appropriately reflects the Company's expected achievement, as these awards are subject to upward or downward adjustment depending on whether the actual financial performance is above or below target levels, with the PSU payout ranging from 0% to 150% of the number of target shares. Compensation expense for stock-based awards is recorded net of estimated forfeitures, which are based on historical forfeiture rates and are revised if actual forfeitures differ from those estimates. We recognized total stock-based compensation expense of $15.3 million and $15.5 million during the three months ended February 28, 2023 and February 28, 2022, respectively. During the six months ended February 28, 2023 and February 28, 2022, we recognized total stock-based compensation expense of $27.5 million and $25.9 million, respectively. As of February 28, 2023, $139.7 million of total unrecognized compensation expense related to non-vested awards is expected to be recognized over a weighted average period of 3.2 years. There was no stock-based compensation capitalized as of February 28, 2023 and February 28, 2022. As of February 28, 2023, we had 4.2 million employee stock-based awards available for grant under the FactSet Research Systems Inc. Stock Option and Award Plan, as Amended and Restated (the "LTIP"). As of February 28, 2023, we had 0.2 million non-employee stock-based awards available for grant under the FactSet Research Systems Inc. Non-Employee Directors’ Stock Option and Award Plan as Amended and Restated (the “Director Plan”). Employee Stock Option Awards Under the LTIP, we granted the following stock options for the six months ended February 28, 2023 and February 28, 2022, which are valued using the lattice-binomial option-pricing model. The majority of the stock options granted relate to the November 1, 2022 and November 1, 2021 annual employee grants.
(1) Includes the annual employee grant on November 1, 2022 and November 1, 2021 of 266,051 and 292,377 stock options, respectively. These annual employee grants both vest 20% annually on the anniversary date of the grant and are fully vested after five years, expiring ten years from the date of grant. As part of the November 1, 2022 annual employee grant, the estimated fair value of this grant leveraged the following assumptions:
Non-Employee Director Stock Option Grant On January 17, 2023, we granted 5,462 stock options under the Director Plan to our non-employee directors, which vest 100% on the first anniversary of the grant date and expire seven years from the date the options were granted, using the Black-Scholes option-pricing model with the following assumptions:
Employee Restricted Stock Awards Restricted Stock Awards granted to employees, under the LTIP, entitle the holders to shares of common stock as the Restricted Stock Awards vest over time, but not to dividends declared on the underlying shares, while the stock subject to the Restricted Stock Awards is unvested. The Restricted Stock Awards are subject to continued employment over a specified period. Vesting of the shares underlying the PSUs are also subject to achieving certain specified performance levels during the measurement period subsequent to the date of grant. Under the LTIP, we granted the following Restricted Stock Awards with the associated weighted average grant date fair value, assuming a target payout for PSUs, for the six months ended February 28, 2023 and February 28, 2022.
(1) The majority of the RSUs granted relate to the November 1, 2022 and November 1, 2021 annual employee grants that both vest 20% annually on the anniversary date of grant and are fully vested after five years. (2) The majority of the PSUs granted relate to the November 1, 2022 and November 1, 2021 annual employee grants that both cliff vest on the third anniversary of the grant date, subject to the achievement of certain performance metrics. The ultimate number of common shares that may be earned pursuant to these PSU awards range from 0% to 150% of the number of target shares, depending on the level of the Company's achievement of stated financial performance objectives. Non-Employee Director Restricted Stock Units The Director Plan provides for the grant of stock-based awards, including RSUs, to non-employee directors of FactSet. On January 17, 2023, we granted 1,653 RSUs to our directors that vest 100% on the first anniversary of the grant date. The RSUs granted to our directors on January 17, 2023 had a grant date fair value of $425.06. Employee Stock Purchase Plan Shares of FactSet common stock may be purchased by eligible employees under our ESPP in three-month intervals. The purchase price is equal to 85% of the lesser of the fair market value of our common stock on the first day or the last day of each three-month offering period. Employee purchases may not exceed 10% of their gross compensation, and there is a $25,000 contribution limit per employee during an offering period. Shares purchased through our ESPP cannot be sold or otherwise transferred for 18 months after purchase. Dividends paid on shares held in our ESPP are used to purchase additional ESPP shares at the market price on the dividend payment date. Stock-based compensation expense related to our ESPP was $0.6 million for the three months ended February 28, 2023 and $0.5 million for the three months ended February 28, 2022. Stock-based compensation expense related to our ESPP was $1.3 million for the six months ended February 28, 2023 and $1.1 million for the six months ended February 28, 2022. As of February 28, 2023, our ESPP had 84,576 shares reserved for future issuance.
|
Segment Information |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION Operating segments are defined as components of an enterprise that have the following characteristics: (i) they engage in business activities from which they may earn revenue and incur expense, (ii) their operating results are regularly reviewed by the chief operating decision maker ("CODM") for resource allocation decisions and performance assessment, and (iii) their discrete financial information is available. Our Chief Executive Officer functions as our CODM. Our operating segments are consistent with our reportable segments and how we, including our CODM, manage our business and the geographic markets in which we serve. Our internal financial reporting structure is based on three segments: the Americas; EMEA; and Asia Pacific. The Americas segment serves our clients throughout North, Central, and South America. The EMEA segment serves our clients in Europe, the Middle East, and Africa. The Asia Pacific segment serves our clients in Asia and Australia. Segment revenues reflect sales to our clients based on their respective geographic locations. Each segment records expenses related to its individual operations with the exception of expenditures associated with our data centers, third-party data costs and corporate headquarters charges, which are recorded by the Americas segment and are not allocated to the other segments. The content collection centers, located in India, the Philippines and Latvia, benefit all our segments, and the expenses incurred at these locations are allocated to each segment based on a percentage of revenues. The following tables reflect the results of operations of our segments as of February 28, 2023 and February 28, 2022:
(1)Capital expenditures includes purchases of property, equipment, leasehold improvements and capitalized internal-use software. (2)Asset impairments incurred during the three and six months ended February 28, 2022 were $10.3 million ($10.2 million recognized in the Americas) and $14.0 million ($13.9 million recognized in the Americas), respectively. This impairment primarily related to vacating certain leased office space resulting in an impairment to our lease ROU assets and associated property, equipment and leasehold improvements. Refer to Note 4, Fair Value Measures and Note 10, Leases for more information on the impairment. Segment Total Assets The following table reflects the total assets for our segments:
|
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
---|---|
Feb. 28, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for annual financial statements; as such, the information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2022. The accompanying unaudited Consolidated Financial Statements include our accounts and those of our wholly-owned subsidiaries; all intercompany activity and balances have been eliminated.In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all normal recurring adjustments, transactions or events discretely impacting the interim periods considered necessary to present fairly our results of operations, financial position, cash flows and equity. |
Reclassifications | Reclassifications In the Consolidated Statements of Income, we reclassified comparative figures for the three and six months ended February 28, 2022 from both Selling, general and administrative and Cost of services to Asset impairments, primarily related to the impairment of our lease right-of-use ("ROU") assets and property, equipment and leasehold improvements, to conform to the current year's presentation.
|
Use of Estimates | Use of Estimates The preparation of our Consolidated Financial Statements and related disclosures in conformity with GAAP, required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates may have been made in areas that include income taxes, stock-based compensation, goodwill and intangible assets, business combinations, long-lived assets, contingencies and impairment assessments. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.
|
Concentrations of Credit Risk and Data Providers | Concentrations of Credit Risks Cash equivalents Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents. We are exposed to credit risk for 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. We have not experienced any losses from maintaining cash accounts in excess of such limits. 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. Accounts Receivable Our accounts receivable credit risk is dependent upon the financial stability of our individual clients; however, this risk is generally limited due to our large and geographically dispersed client base. No single client represented more than 3% of our total subscription revenues in any period presented. The receivable reserve was $3.1 million and $2.8 million as of February 28, 2023 and August 31, 2022, respectively. We do not require collateral from our clients. Derivative Instruments Our use of derivative instruments exposes us to credit risk to the extent counterparties may be unable to meet the terms of their agreements. To mitigate credit risk, we limit counterparties to credit-worthy financial institutions and use several institutions to reduce concentration risk. We do not expect any losses as a result of default by our counterparties. Concentrations of Data Providers We integrate data from various third-party sources into our hosted proprietary data and analytics platform, which our clients access to perform their analyses. As certain data sources have a limited number of suppliers, we make every effort to assure that, where reasonable, alternative sources are available. We are not dependent on any individual third-party data supplier in order to meet the needs of our clients, with only two data suppliers each representing more than 10% of our total data costs for the six months ended February 28, 2023.
|
Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements We did not adopt any new standards or updates issued by the Financial Accounting Standards Board ("FASB") during the three and six months ended February 28, 2023 that had a material impact on our Consolidated Financial Statements. Accounting Pronouncements Not Yet Adopted There were no new accounting pronouncements issued or effective as of February 28, 2023 that had, or are expected to have, a material impact on our Consolidated Financial Statements.
|
Revenue Recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | The following table presents this disaggregation by segment:
|
Fair Value Measures (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables show, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis as of February 28, 2023 and August 31, 2022. We did not have any transfers between levels of fair value measurements during the periods presented below. We held no Level 3 assets or liabilities measured at fair value on a recurring basis as of February 28, 2023 and August 31, 2022.
(1) Our corporate money market funds are readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine its fair value. Our corporate money market funds are included in Cash and cash equivalents within the Consolidated Balance Sheets. (2) Our mutual funds' fair value is based on the fair value of the underlying investments held by the mutual funds, allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments is based on observable inputs. Our mutual funds are included in Investments (short-term) within the Consolidated Balance Sheets. (3) Our derivative instruments include our foreign exchange forward contracts and interest rate swap agreements. We utilize the income approach to measure fair value for our foreign exchange forward contracts. The income approach uses pricing models that rely on market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads. To estimate fair value for our interest rate swap agreements, we utilize a present value of future cash flows, leveraging a model-derived valuation that uses observable inputs such as interest rate yield curves. Refer to Note 5, Derivative Instruments, for more information on our derivative instruments and their classification within the Consolidated Balance Sheets.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at carrying value and fair value | The following table summarizes information on our outstanding debt as of February 28, 2023 and August 31, 2022:
|
Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of gross notional values of derivative instruments | The following table summarizes the gross notional value of foreign currency forward contracts to purchase British Pound Sterling, Euros, Indian Rupees and Philippine Pesos with U.S. dollars as of February 28, 2023 and August 31, 2022.
The following is a summary of the gross notional values of the derivative instruments:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the fair values of derivative instruments | The following is a summary of the fair values of our derivative instruments:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of pre-tax effect of derivative instruments in cash flow hedging relationships | The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended February 28, 2023 and February 28, 2022, respectively:
|
Acquisitions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of acquisition date fair values of major classes of assets acquired and liabilities assumed | The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:
(1) Includes an accounts receivable balance of $29.5 million. (2) Includes a deferred revenues balance of $99.4 million. The CGS acquisition was accounted for in accordance with our adoption of ASU No. 2021-08; as such, the deferred revenues did not include a fair value adjustment. Refer to Note 2, Significant Accounting Policies in the Notes included in Item 8. of our Annual Report on Form 10-K for the fiscal year ended August 31, 2022 for more information on ASU No. 2021-08. The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:
|
Goodwill (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill | Changes in the carrying amount of goodwill by segment for the six months ended February 28, 2023 are as follows:
|
Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of identifiable intangible assets | The estimated useful life, gross carrying amounts and accumulated amortization totals related to our identifiable intangible assets are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated intangible asset amortization expense | As of February 28, 2023, estimated intangible asset amortization expense for each of the next five years and thereafter are as follows:
|
Income Taxes (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income taxes | The provision for income taxes and effective tax rate are as follows:
|
Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum commitments | The following table reconciles our future undiscounted cash flows related to our operating leases and the reconciliation to the combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets as of February 28, 2023:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other information related to operating leases | The following table includes the components of our occupancy costs in our Consolidated Statements of Income:
(1) Operating lease costs include costs associated with fixed lease payments and index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions elected by us. (2) Variable lease costs include costs that were not fixed at the lease commencement date and are not dependent on an index or rate. These costs were not included in the measurement of lease liabilities and primarily include variable non-lease costs, such as utilities, real estate taxes, insurance and maintenance, as well as lease costs for those leases that qualified for the short-term lease exception. The following table summarizes our lease term and discount rate assumptions related to the operating leases recorded on the Consolidated Balance Sheets:
The following table summarizes supplemental cash flow information related to our operating leases:
(1)Primarily includes new lease arrangements entered into during the period and contract modifications that extend our lease terms and/or provide additional rights. (2)Primarily relates to lease term reassessments based on contractual options to early terminate, resulting in a reduction to the lease liability and the corresponding lease ROU asset.
|
Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt obligations | Our total debt obligations as of February 28, 2023 and August 31, 2022 consisted of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of annual maturities of debt obligations | As of February 28, 2023, annual maturities on our total debt obligations, based on contract maturity, were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of interest expense | The following table presents the interest expense on our outstanding debt which is included in Interest expense, net in our Consolidated Statements of Income:
(1) Interest expense on our outstanding debt includes the related amortization of debt issuance costs and debt discounts, net of the effects of the related interest rate swap agreements.
|
Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share repurchases |
(1) Amounts do not include 1,853 shares and 675 shares surrendered by grantees to satisfy withholding tax obligations due upon the vesting or exercise of stock-based awards valued at $0.8 million and $0.3 million during the three months ended February 28, 2023 and February 28, 2022, respectively. Amounts do not include 27,713 shares and 7,422 shares surrendered by grantees to satisfy withholding tax obligations due upon the vesting or exercise of stock-based awards valued at $11.8 million and $3.3 million during the six months ended February 28, 2023 and February 28, 2022, respectively.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of dividends declared | Our Board of Directors declared dividends during the three and six months ended February 28, 2023 and February 28, 2022 as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of AOCL | The components of AOCL are as follows:
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | A reconciliation of the weighted average shares outstanding used in the Basic and Diluted EPS computation is as follows:
|
Stock Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option activity | Under the LTIP, we granted the following stock options for the six months ended February 28, 2023 and February 28, 2022, which are valued using the lattice-binomial option-pricing model. The majority of the stock options granted relate to the November 1, 2022 and November 1, 2021 annual employee grants.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assumptions about stock options | As part of the November 1, 2022 annual employee grant, the estimated fair value of this grant leveraged the following assumptions:
On January 17, 2023, we granted 5,462 stock options under the Director Plan to our non-employee directors, which vest 100% on the first anniversary of the grant date and expire seven years from the date the options were granted, using the Black-Scholes option-pricing model with the following assumptions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock awards activity | Under the LTIP, we granted the following Restricted Stock Awards with the associated weighted average grant date fair value, assuming a target payout for PSUs, for the six months ended February 28, 2023 and February 28, 2022.
(1) The majority of the RSUs granted relate to the November 1, 2022 and November 1, 2021 annual employee grants that both vest 20% annually on the anniversary date of grant and are fully vested after five years. (2) The majority of the PSUs granted relate to the November 1, 2022 and November 1, 2021 annual employee grants that both cliff vest on the third anniversary of the grant date, subject to the achievement of certain performance metrics. The ultimate number of common shares that may be earned pursuant to these PSU awards range from 0% to 150% of the number of target shares, depending on the level of the Company's achievement of stated financial performance objectives.
|
Segment Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information | The following tables reflect the results of operations of our segments as of February 28, 2023 and February 28, 2022:
(1)Capital expenditures includes purchases of property, equipment, leasehold improvements and capitalized internal-use software. (2)Asset impairments incurred during the three and six months ended February 28, 2022 were $10.3 million ($10.2 million recognized in the Americas) and $14.0 million ($13.9 million recognized in the Americas), respectively. This impairment primarily related to vacating certain leased office space resulting in an impairment to our lease ROU assets and associated property, equipment and leasehold improvements. Refer to Note 4, Fair Value Measures and Note 10, Leases for more information on the impairment. Segment Total Assets The following table reflects the total assets for our segments:
|
Description of Business (Details) |
6 Months Ended |
---|---|
Feb. 28, 2023
segment
workflow
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Number of workflows | workflow | 3 |
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Feb. 28, 2023 |
Aug. 31, 2022 |
|
Accounting Policies [Abstract] | ||
Accounts receivable reserve | $ 3,120 | $ 2,776 |
Data costs | Supplier Concentration Risk | Supplier One | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage (more than) | 10.00% | |
Data costs | Supplier Concentration Risk | Supplier Two | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage (more than) | 10.00% |
Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Revenue from External Customer [Line Items] | ||||
Total Revenues | $ 515,085 | $ 431,119 | $ 1,019,900 | $ 855,844 |
Americas | ||||
Revenue from External Customer [Line Items] | ||||
Total Revenues | 331,121 | 273,659 | 654,488 | 540,572 |
EMEA | ||||
Revenue from External Customer [Line Items] | ||||
Total Revenues | 132,508 | 114,591 | 263,246 | 229,594 |
Asia Pacific | ||||
Revenue from External Customer [Line Items] | ||||
Total Revenues | $ 51,456 | $ 42,869 | $ 102,166 | $ 85,678 |
Fair Value Measures - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Fair Value Disclosures [Abstract] | ||||
Asset impairments | $ 447 | $ 10,292 | $ 729 | $ 13,987 |
Impairment charges | $ 9,700 | $ 13,400 |
Acquisitions - Narrative (Details) - USD ($) $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
Mar. 01, 2022 |
Oct. 12, 2021 |
Feb. 28, 2023 |
Feb. 28, 2022 |
Aug. 31, 2022 |
|
Business Acquisition [Line Items] | |||||
Purchase price | $ 0 | $ 50,018 | |||
Goodwill | $ 977,359 | $ 965,848 | |||
CUSIP Global Services | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 1,932,000 | ||||
Goodwill | $ 214,970 | ||||
Cobalt Software, Inc. | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 50,000 | ||||
Goodwill | $ 41,338 |
Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Feb. 28, 2023
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning Balance | $ 965,848 |
Foreign currency translations | 11,511 |
Ending Balance | 977,359 |
Americas | |
Goodwill [Roll Forward] | |
Beginning Balance | 686,412 |
Foreign currency translations | 0 |
Ending Balance | 686,412 |
EMEA | |
Goodwill [Roll Forward] | |
Beginning Balance | 277,087 |
Foreign currency translations | 11,463 |
Ending Balance | 288,550 |
Asia Pacific | |
Goodwill [Roll Forward] | |
Beginning Balance | 2,349 |
Foreign currency translations | 48 |
Ending Balance | $ 2,397 |
Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average useful life | 32 years 9 months 18 days | |||
Amortization expense | $ 21.7 | $ 9.1 | $ 43.4 | $ 19.2 |
Acquisitions Excluding CGS | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average useful life | 9 years 3 months 18 days |
Intangible Assets - Estimated Intangible Asset Amortization Expense (Details) - USD ($) $ in Thousands |
Feb. 28, 2023 |
Aug. 31, 2022 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (remaining six months) | $ 46,853 | |
2024 | 85,169 | |
2025 | 78,644 | |
2026 | 70,020 | |
2027 | 63,279 | |
Thereafter | 1,525,809 | |
Net carrying amount | $ 1,869,774 | $ 1,895,909 |
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 156,762 | $ 121,956 | $ 314,647 | $ 241,886 |
Provision for income taxes | $ 25,169 | $ 12,018 | $ 46,256 | $ 24,301 |
Effective tax rate | 16.10% | 9.90% | 14.70% | 10.00% |
Income Taxes - Narrative (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 16.10% | 9.90% | 14.70% | 10.00% |
Leases - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
Aug. 31, 2022 |
|
Lessee, Lease, Description [Line Items] | |||||
ROU assets | $ 150,174 | $ 150,174 | $ 159,458 | ||
Lease liabilities | 225,242 | 225,242 | |||
Impairment charge, lease ROU assets | $ 0 | $ 5,800 | $ 0 | $ 7,200 | |
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Remaining lease terms | 1 year | 1 year | |||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Remaining lease terms | 13 years | 13 years |
Leases - Schedule of Future Minimum Commitments (Details) $ in Thousands |
Feb. 28, 2023
USD ($)
|
---|---|
Leases [Abstract] | |
2023 (remaining six months) | $ 19,171 |
2024 | 35,952 |
2025 | 33,864 |
2026 | 33,043 |
2027 | 31,777 |
Thereafter | 114,427 |
Total | 268,234 |
Less: Imputed interest | 42,992 |
Present value | $ 225,242 |
Leases - Schedule of Other Information Related to Operating Lease (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
Aug. 31, 2022 |
|
Leases [Abstract] | |||||
Operating lease cost | $ 8,156 | $ 10,221 | $ 16,233 | $ 20,699 | |
Variable lease cost | $ 3,834 | $ 2,858 | $ 8,054 | 5,748 | |
Weighted average remaining lease term (in years) | 8 years 2 months 12 days | 8 years 2 months 12 days | 8 years 7 months 6 days | ||
Weighted average discount rate (incremental borrowing rate) | 4.40% | 4.40% | 4.40% | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 19,596 | 22,172 | |||
Lease ROU assets obtained in exchange for lease liabilities | 1,379 | 2,680 | |||
Reductions to ROU assets resulting from reductions to lease liabilities | $ 0 | $ (8,893) |
Debt - Debt Obligations (Details) - USD ($) $ in Thousands |
Feb. 28, 2023 |
Aug. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,750,000 | |
Total unamortized discounts and debt issuance costs | (14,391) | $ (17,576) |
Total net carrying value of debt | 1,735,609 | 1,982,424 |
Senior Notes | 2027 Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 500,000 | 500,000 |
Senior Notes | 2032 Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 500,000 | 500,000 |
Term Loan | Line of Credit | 2022 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 500,000 | 750,000 |
Revolving Credit Facility | Line of Credit | 2022 Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 250,000 | $ 250,000 |
Debt - Annual Maturities of Debt Obligations (Details) $ in Thousands |
Feb. 28, 2023
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2023 (remaining six months) | $ 0 |
2024 | 0 |
2025 | 500,000 |
2026 | 0 |
2027 | 750,000 |
Thereafter | 500,000 |
Total net carrying value of debt | $ 1,750,000 |
Debt - Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Debt Disclosure [Abstract] | ||||
Interest expense on outstanding debt | $ 16,728 | $ 1,908 | $ 33,256 | $ 3,826 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Feb. 28, 2023 |
Aug. 31, 2022 |
|
Concentration Risk [Line Items] | ||
Purchase commitment, remaining minimum amount committed | $ 373.9 | |
Letters of credit outstanding | $ 0.5 | 0.5 |
Capital Commitment | ||
Concentration Risk [Line Items] | ||
Capital commitments | 0.8 | $ 1.1 |
Data Purchase Agreement | ||
Concentration Risk [Line Items] | ||
Long-term purchase commitment amount | $ 26.0 |
Stockholders' Equity - Share Repurchases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Equity [Abstract] | ||||
Repurchase of common stock (in shares) | 0 | 0 | 0 | 46,200 |
Repurchases of common stock | $ 0 | $ 0 | $ 0 | $ 18,639 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Remaining authorized repurchase amount | $ 181,300 | $ 181,300 | ||
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares repurchased from employees (in shares) | 1,853 | 675 | 27,713 | 7,422 |
Value of shares repurchased in settlement of employee tax withholding obligations | $ 800 | $ 300 | $ 11,800 | $ 3,300 |
Stockholders' Equity - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Feb. 28, 2023 |
Nov. 30, 2022 |
May 31, 2022 |
Feb. 28, 2022 |
Nov. 30, 2021 |
|
Equity [Abstract] | |||||
Dividends per Share of Common Stock (in USD per share) | $ 0.89 | $ 0.89 | $ 0.89 | $ 0.82 | $ 0.82 |
Total Amount | $ 34,099 | $ 34,010 | $ 31,065 | $ 30,973 | |
Dividends, percentage increase | 8.50% |
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
Feb. 28, 2023 |
Nov. 30, 2022 |
Aug. 31, 2022 |
Feb. 28, 2022 |
Nov. 30, 2021 |
Aug. 31, 2021 |
---|---|---|---|---|---|---|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total AOCL | $ 1,607,154 | $ 1,474,128 | $ 1,331,408 | $ 1,215,981 | $ 1,098,895 | $ 1,016,353 |
Accumulated Other Comprehensive Loss | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total AOCL | (92,243) | $ (93,059) | (108,383) | $ (55,848) | $ (57,670) | $ (38,962) |
Accumulated unrealized gains (losses) on cash flow hedges, net of tax | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total AOCL | 7,450 | 3,149 | ||||
Accumulated foreign currency translation adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total AOCL | $ (99,693) | $ (111,532) |
Earnings Per Share - Weighted Average Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Numerator | ||||
Net income used for calculating Basic EPS | $ 131,593 | $ 109,938 | $ 268,391 | $ 217,585 |
Net income used for calculating Diluted EPS | $ 131,593 | $ 109,938 | $ 268,391 | $ 217,585 |
Denominator | ||||
Weighted average common shares used in the calculation of Basic EPS (in shares) | 38,281 | 37,837 | 38,201 | 37,685 |
Common stock equivalents associated with stock-based compensation plan (in shares) | 700 | 924 | 746 | 943 |
Shares used in the calculation of Diluted EPS (in shares) | 38,981 | 38,761 | 38,947 | 38,628 |
Basic EPS (in USD per share) | $ 3.44 | $ 2.91 | $ 7.03 | $ 5.77 |
Diluted EPS (in USD per share) | $ 3.38 | $ 2.84 | $ 6.89 | $ 5.63 |
Earnings Per Share - Narrative (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 543,082 | 0 | 543,082 | 0 |
PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 93,308 | 95,865 | 93,308 | 95,865 |
Stock Based Compensation - Stock Option Activity (Details) - Employee - $ / shares |
6 Months Ended | |||
---|---|---|---|---|
Nov. 01, 2022 |
Nov. 01, 2021 |
Feb. 28, 2023 |
Feb. 28, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted (in shares) | 266,051 | 292,377 | 267,641 | 302,493 |
Weighted average exercise price (in USD per share) | $ 426.25 | $ 434.70 | ||
Weighted average grant date fair value (in dollars per share) | $ 125.58 | $ 102.45 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average exercise price (in USD per share) | $ 426.25 | |||
Weighted average grant date fair value (in dollars per share) | $ 125.62 | |||
Vesting percentage | 20.00% | 20.00% | ||
Vesting period | 5 years | 5 years | ||
Expiration period | 10 years | 10 years |
Segment Information - Narrative (Details) |
6 Months Ended |
---|---|
Feb. 28, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Number of operating segments | 3 |
Segment Information - Results of Operations and Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 28, 2023 |
Feb. 28, 2022 |
Feb. 28, 2023 |
Feb. 28, 2022 |
Aug. 31, 2022 |
|
Revenues | $ 515,085 | $ 431,119 | $ 1,019,900 | $ 855,844 | |
Operating income | 169,250 | 123,348 | 341,145 | 246,009 | |
Capital expenditures | 17,456 | 11,963 | 35,416 | 20,546 | |
Asset impairments | 447 | 10,292 | 729 | 13,987 | |
Assets | 4,001,075 | 4,001,075 | $ 4,014,305 | ||
Americas | |||||
Revenues | 331,121 | 273,659 | 654,488 | 540,572 | |
Operating income | 61,181 | 48,903 | 128,712 | 104,401 | |
Capital expenditures | 15,589 | 10,346 | 31,343 | 17,549 | |
Asset impairments | 10,200 | 13,900 | |||
Assets | 3,189,973 | 3,189,973 | 3,191,313 | ||
EMEA | |||||
Revenues | 132,508 | 114,591 | 263,246 | 229,594 | |
Operating income | 68,941 | 45,944 | 136,263 | 86,598 | |
Capital expenditures | 739 | 252 | 1,312 | 362 | |
Assets | 561,294 | 561,294 | 580,450 | ||
Asia Pacific | |||||
Revenues | 51,456 | 42,869 | 102,166 | 85,678 | |
Operating income | 39,128 | 28,501 | 76,170 | 55,010 | |
Capital expenditures | 1,128 | $ 1,365 | 2,761 | $ 2,635 | |
Assets | $ 249,808 | $ 249,808 | $ 242,542 |
EDWP^VJYKJ\OYDUS_]WE93V=EZNB?E?=E^OV+[?59E4T[8^;N\OZ?E,6
MLVVEU?*2AV%TN2H6ZXN;J^WOWF]NKJJ'9KE8E^\W0?VP6A6;+S^4R^KI^H)=
M?/W%A\7=O.E^<7ES=5_ XAR .>5<:JT=[&^R)Y78-C<>7]+R:Q;8_A0PZ:F%$G&"]>DX\XAZSI
MH2U^XPKO &UL[5EK
M;QN[$?TKA!JT,;"1]?0C-S8@.X\*;1(W2N[]4/0#M PZVIH=M,"'(H^P?5'*^ "]H$I1X:_)';=-)HNL
M+B3',KL7LJJ*>R:8U(*<5R7G"3+R3E+K&K3=0@>DQPN^HJ+P'Y*Y)VE?>_,Z
MY_<0$TP2EPJ9?X'N-_V20[4LFE, B-(]]%(#4(RQ%QB*-*K:1_P0#;]NHVF"
MW$Y3]+4$9)MI8Z>OM4),(B/K,=P[)[$.:+RZK%K4LZ+. 4@*H+W0QJ,9RU Y
M;](0"$M0Z$!H)N_<@+Z##*')X'.K#0Q)RA7Z0DU-FU3P"*+1)O>=/>,,28VOP1QFZBA>N"G7$U@"-FT'1
=4("/>BD RN1
M]EUF[&_9X/D6JG^=VXD<&E:CT,QDZ"4PD?Z)?@0!]9%!T290M R*ED/1- K-
M/'^E5]"D7T'S^Q&D*YCQ*!&IO6#V!QE*/A0M@Z+ETG6G42.B45%-6GL]3/KU
ML!?Y$22A347MW=@F&RJ(0=$R*%H.1=,GA]?DNA?$I%\00SH2_*&&WA.D*SEQ
M'J7V#GD"C9H1426S'0G0D!J%9F9 KYE)OV;V6D>").0M(1W7F71?F+1/)R.1
MHM JEA%((T
)5T2(
/<;]/LQ/OU'
M=>TOIOIIO[:]_HZ2M *]_4(-^"-M II ( 5\Z)!440/='/1G^I8G@G0L&1/!
M0MS\^CE>F1M3;#3!SD.RW>?O[T
_?BX)OSVGF=@E)0%R