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 29, 2024 and February 28, 2023 | ||||||||
Consolidated Statements of Comprehensive Income for the three and six months ended February 29, 2024 and February 28, 2023 | ||||||||
Consolidated Balance Sheets at February 29, 2024 and August 31, 2023 | ||||||||
Consolidated Statements of Cash Flows for the six months ended February 29, 2024 and February 28, 2023 | ||||||||
Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended February 29, 2024 and February 28, 2023 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating expenses | ||||||||||||||
Cost of services | ||||||||||||||
Selling, general and administrative | ||||||||||||||
Asset impairments | ||||||||||||||
Total operating expenses | ||||||||||||||
Operating income | ||||||||||||||
Other income (expense), net | ||||||||||||||
Interest income | ||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||
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 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Net income | $ | $ | $ | $ | ||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||
Net unrealized gain (loss) on cash flow hedges(1) | ( | ( | ( | |||||||||||
Foreign currency translation adjustment gains (losses) | ( | ( | ||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||
Comprehensive income | $ | $ | $ | $ |
(in thousands, except share data) | February 29, 2024 | August 31, 2023 | ||||||
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 | ||||||||
Current taxes payable | ||||||||
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 11) | ||||||||
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 29, | February 28, | |||||||
(in thousands) | 2024 | 2023 | ||||||
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 | ( | ( | ||||||
Purchases of investments | ( | ( | ||||||
Net cash provided by (used in) investing activities | ( | ( | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Repayments 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, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Other comprehensive income (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 29, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
For the Six Months Ended February 29, 2024 | ||||||||||||||||||||||||||
(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, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Other comprehensive income (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 29, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
(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 | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||
Page | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Americas | $ | $ | $ | $ | ||||||||||
EMEA | ||||||||||||||
Asia Pacific | ||||||||||||||
Total Revenues | $ | $ | $ | $ |
Fair Value Measurements as of February 29, 2024 | ||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Assets | ||||||||||||||
Money market funds(1) | $ | $ | $ | $ | ||||||||||
Mutual funds(2) | ||||||||||||||
Derivative instruments(3) | ||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | ||||||||||
Liabilities | ||||||||||||||
Derivative instruments(3) | $ | $ | $ | $ | ||||||||||
Contingent Liability(4) | ||||||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ |
Fair Value Measurements as of August 31, 2023 | ||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||
Assets | ||||||||||||||
Money market funds(1) | $ | $ | $ | $ | ||||||||||
Mutual funds(2) | ||||||||||||||
Derivative instruments(3) | ||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | ||||||||||
Liabilities | ||||||||||||||
Derivative instruments(3) | $ | $ | $ | $ | ||||||||||
Contingent Liability(4) | ||||||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ |
February 29, 2024 | August 31, 2023 | ||||||||||||||||
(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 29, 2024 | August 31, 2023 | |||||||||||||
(in thousands) | Local Currency Amount | Notional Contract Amount (USD) | Local Currency Amount | Notional Contract Amount (USD) | ||||||||||
British Pound Sterling | £ | $ | £ | $ | ||||||||||
Indian Rupee | Rs | Rs | ||||||||||||
Euro | € | € | ||||||||||||
Philippine Peso | ₱ | ₱ | ||||||||||||
Total | $ | $ |
(in thousands) | Gross Notional Value | |||||||
February 29, 2024 | August 31, 2023 | |||||||
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 29, 2024 | August 31, 2023 | Balance Sheet Classification | February 29, 2024 | August 31, 2023 | ||||||||||||||
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 29, | February 28, | February 29, | February 28, | |||||||||||||
Derivatives in Cash Flow Hedging Relationships | 2024 | 2023 | 2024 | 2023 | |||||||||||||
Foreign currency forward contracts | $ | ( | $ | ( | SG&A | $ | ( | $ | ( | ||||||||
Interest rate swap agreement | Interest expense | ||||||||||||||||
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 29, 2024 and February 28, 2023: | |||||||||||||||||
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 29, | February 28, | February 29, | February 28, | |||||||||||||
Derivatives in Cash Flow Hedging Relationships | 2024 | 2023 | 2024 | 2023 | |||||||||||||
Foreign currency forward contracts | $ | ( | $ | SG&A | $ | $ | ( | ||||||||||
Interest rate swap agreement | Interest expense | ||||||||||||||||
Total cash flow hedges | $ | ( | $ | $ | $ | ||||||||||||
(in thousands) | Americas | EMEA | Asia Pacific | Total | ||||||||||
Balance at August 31, 2023 | $ | $ | $ | $ | ||||||||||
Acquisitions | ||||||||||||||
Foreign currency translations | ( | ( | ( | |||||||||||
Balance at February 29, 2024 | $ | $ | $ | $ |
February 29, 2024 | August 31, 2023 | ||||||||||||||||||||||
(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 | |||||||||||||||||||||||
Developed technology | |||||||||||||||||||||||
Acquired databases | |||||||||||||||||||||||
Software technology | |||||||||||||||||||||||
Data content | |||||||||||||||||||||||
Non-compete agreements | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Amortization expense | $ | $ | $ | $ |
(in thousands) | Estimated Amortization Expense | ||||
Years Ended August 31, | |||||
2024 (remaining six months) | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Income before income taxes | $ | $ | $ | $ | ||||||||||
Provision for income taxes | $ | $ | $ | $ | ||||||||||
Effective tax rate | % | % | % | % |
(in thousands) | Minimum Lease Payments | ||||
Years Ended August 31, | |||||
2024 (remaining six months) | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total minimum lease payments | $ | ||||
Less: Imputed interest | |||||
Total lease liabilities | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Operating lease costs(1) | $ | $ | $ | $ | ||||||||||
Variable lease costs(2) | $ | $ | $ | $ |
As of February 29, 2024 | As of August 31, 2023 | |||||||
Weighted average remaining lease term (in years) | ||||||||
Weighted average discount rate (IBR) | % | % |
Six Months Ended | ||||||||
February 29, | February 28, | |||||||
(in thousands) | 2024 | 2023 | ||||||
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 29, 2024 | August 31, 2023 | ||||||||||
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 | ||||
Years Ended August 31, | |||||
2024 (remaining six months) | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Interest expense on outstanding debt(1) | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands, except share data) | 2024 | 2023 | 2024 | 2023 | ||||||||||
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 2024 | ||||||||||||||
First Quarter | $ | November 30, 2023 | $ | December 21, 2023 | ||||||||||
Second Quarter | $ | February 29, 2024 | $ | March 21, 2024 | ||||||||||
Fiscal 2023 | ||||||||||||||
First Quarter | $ | November 30, 2022 | $ | December 15, 2022 | ||||||||||
Second Quarter | $ | February 28, 2023 | $ | March 16, 2023 | ||||||||||
(in thousands) | February 29, 2024 | August 31, 2023 | ||||||
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 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Numerator | ||||||||||||||
Net income used for calculating Basic EPS and Diluted EPS | $ | $ | $ | $ | ||||||||||
Denominator | ||||||||||||||
Weighted average common shares used in the calculation of Basic EPS | ||||||||||||||
Common stock equivalents associated with stock-based compensation plan | ||||||||||||||
Shares used in the calculation of Diluted EPS | ||||||||||||||
Basic EPS | $ | $ | $ | $ | ||||||||||
Diluted EPS | $ | $ | $ | $ |
As of February 29, | As of February 28, | |||||||
(in thousands) | 2024 | 2023 | ||||||
Out-of-the-money stock options | ||||||||
PSUs |
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Stock-based compensation expense | $ | $ | $ | $ |
Six Months Ended | ||||||||
February 29, | February 28, | |||||||
2024 | 2023 | |||||||
Stock options granted(1) | ||||||||
Weighted average exercise price | $ | $ | ||||||
Weighted average grant date fair value | $ | $ |
November 1, 2023 Annual Employee Grant Details | |||||
Risk-free interest rate | |||||
Expected life (years) | |||||
Expected volatility | |||||
Dividend yield | |||||
Estimated fair value | $ | ||||
Exercise price | $ | ||||
Six Months Ended | ||||||||||||||
February 29, | February 28, | |||||||||||||
2024 | 2023 | |||||||||||||
Shares | Weighted Average Grant Date Fair Value Per Award | Shares | Weighted Average Grant Date Fair Value Per Award | |||||||||||
RSUs Granted(1) | $ | $ | ||||||||||||
PSUs Granted(2) | $ | $ | ||||||||||||
Performance adjustment - PSUs(3) | $ | $ | ||||||||||||
Total Restricted Stock Awards |
(in thousands) | Americas | EMEA | Asia Pacific | Total | ||||||||||
For the three months ended February 29, 2024 | ||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating income | $ | $ | $ | $ | ||||||||||
Capital expenditures(1) | $ | $ | $ | $ | ||||||||||
(in thousands) | Americas | EMEA | Asia Pacific | Total | ||||||||||
For the three months ended February 28, 2023 | ||||||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating income | $ | $ | $ | $ | ||||||||||
Capital expenditures(1) | $ | $ | $ | $ | ||||||||||
(in thousands) | ||||||||||||||
For the six months ended February 29, 2024 | Americas | EMEA | Asia Pacific | Total | ||||||||||
Revenues | $ | $ | $ | $ | ||||||||||
Operating income | $ | $ | $ | $ | ||||||||||
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) | February 29, 2024 | August 31, 2023 | ||||||
Segment Assets | ||||||||
Americas | $ | $ | ||||||
EMEA | ||||||||
Asia Pacific | ||||||||
Total assets | $ | $ |
(dollar amounts in millions) | As of February 29, 2024 | ||||
As reported ASV plus Professional Services(1) | $ | 2,208.8 | |||
Currency impact(2) | 0.7 | ||||
Organic ASV plus Professional Services | $ | 2,209.5 | |||
Organic ASV plus Professional Services annual growth rate | 5.4 | % |
As of February 29, 2024 | As of February 28, 2023 | Change | |||||||||
Clients(1) | 8,020 | 7,730 | 3.8 | % | |||||||
Users | 206,478 | 186,463 | 10.7 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 29, | February 28, | % Change | February 29, | February 28, | % Change | |||||||||||||||
(dollar amounts in thousands, except share and per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
Revenues | $ | 545,945 | $ | 515,085 | 6.0 | % | $ | 1,088,161 | $ | 1,019,900 | 6.7 | % | ||||||||
Cost of services | 255,142 | 240,806 | 6.0 | % | 506,763 | 467,848 | 8.3 | % | ||||||||||||
Selling, general and administrative | 108,807 | 104,582 | 4.0 | % | 209,518 | 210,178 | (0.3) | % | ||||||||||||
Asset impairments | 54 | 447 | (87.9) | % | 898 | 729 | 23.2 | % | ||||||||||||
Operating income | $ | 181,942 | $ | 169,250 | 7.5 | % | $ | 370,982 | $ | 341,145 | 8.7 | % | ||||||||
Net income | $ | 140,940 | $ | 131,593 | 7.1 | % | $ | 289,495 | $ | 268,391 | 7.9 | % | ||||||||
Diluted weighted average common shares | 38,650 | 38,981 | 38,646 | 38,947 | ||||||||||||||||
Diluted EPS | $ | 3.65 | $ | 3.38 | 8.0 | % | $ | 7.49 | $ | 6.89 | 8.7 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 29, | February 28, | % Change | February 29, | February 28, | % Change | |||||||||||||||
(dollar amounts in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
Americas | $ | 352,618 | $ | 331,121 | 6.5 | % | $ | 700,985 | $ | 654,488 | 7.1 | % | ||||||||
% of revenues | 64.6 | % | 64.3 | % | 64.4 | % | 64.2 | % | ||||||||||||
EMEA | $ | 139,176 | $ | 132,508 | 5.0 | % | $ | 278,737 | $ | 263,246 | 5.9 | % | ||||||||
% of revenues | 25.5 | % | 25.7 | % | 25.6 | % | 25.8 | % | ||||||||||||
Asia Pacific | $ | 54,151 | $ | 51,456 | 5.2 | % | $ | 108,439 | $ | 102,166 | 6.1 | % | ||||||||
% of revenues | 9.9 | % | 10.0 | % | 10.0 | % | 10.0 | % | ||||||||||||
Consolidated | $ | 545,945 | $ | 515,085 | 6.0 | % | $ | 1,088,161 | $ | 1,019,900 | 6.7 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 29, | February 28, | February 29, | February 28, | % Change | ||||||||||||||||
(dollar amounts in thousands) | 2024 | 2023 | % Change | 2024 | 2023 | |||||||||||||||
Cost of services | $ | 255,142 | $ | 240,806 | 6.0 | % | $ | 506,763 | $ | 467,848 | 8.3 | % | ||||||||
SG&A | 108,807 | 104,582 | 4.0 | % | 209,518 | 210,178 | (0.3) | % | ||||||||||||
Asset impairments | 54 | 447 | (87.9) | % | 898 | 729 | 23.2 | % | ||||||||||||
Total operating expenses | $ | 364,003 | $ | 345,835 | 5.3 | % | $ | 717,179 | $ | 678,755 | 5.7 | % | ||||||||
Operating income | $ | 181,942 | $ | 169,250 | 7.5 | % | $ | 370,982 | $ | 341,145 | 8.7 | % | ||||||||
Operating margin | 33.3 | % | 32.9 | % | 34.1 | % | 33.4 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
February 29, | February 28, | % Change | February 29, | February 28, | % Change | ||||||||||||||||||
(dollar amounts in thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Americas | $ | 81,711 | $ | 61,181 | 33.6 | % | $ | 162,559 | $ | 128,712 | 26.3 | % | |||||||||||
EMEA | 62,839 | 68,941 | (8.9) | % | 131,704 | 136,263 | (3.3) | % | |||||||||||||||
Asia Pacific | 37,392 | 39,128 | (4.4) | % | 76,719 | 76,170 | 0.7 | % | |||||||||||||||
Total Operating Income | $ | 181,942 | $ | 169,250 | 7.5 | % | $ | 370,982 | $ | 341,145 | 8.7 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||||||||
(dollar amounts in thousands) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||
Income before income taxes | $ | 168,645 | $ | 156,762 | 7.6 | % | $ | 343,841 | $ | 314,647 | 9.3 | % | ||||||||
Provision for income taxes | $ | 27,705 | $ | 25,169 | 10.1 | % | $ | 54,346 | $ | 46,256 | 17.5 | % | ||||||||
Effective tax rate | 16.4 | % | 16.1 | % | 15.8 | % | 14.7 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||||||||
(dollar amounts in thousands, except share and per share data) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||
Net income | $ | 140,940 | $ | 131,593 | 7.1 | % | $ | 289,495 | $ | 268,391 | 7.9 | % | ||||||||
Diluted weighted average common shares | 38,650 | 38,981 | (0.8) | % | 38,646 | 38,947 | (0.8) | % | ||||||||||||
Diluted EPS | $ | 3.65 | $ | 3.38 | 8.0 | % | $ | 7.49 | $ | 6.89 | 8.7 | % |
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 29, | February 28, | % Change | February 29, | February 28, | % Change | |||||||||||||||
(dollar amounts in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
Revenues | $ | 545,945 | $ | 515,085 | 6.0 | % | $ | 1,088,161 | $ | 1,019,900 | 6.7 | % | ||||||||
Acquisition revenues | (137) | — | (311) | — | ||||||||||||||||
Currency impact | 322 | — | (327) | — | ||||||||||||||||
Organic revenues | $ | 546,130 | $ | 515,085 | 6.0 | % | $ | 1,087,523 | $ | 1,019,900 | 6.6 | % | ||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||||||||
(dollar amounts in thousands, except per share data) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||
Operating income | $ | 181,942 | $ | 169,250 | 7.5% | $ | 370,982 | $ | 341,145 | 8.7% | ||||||||||
Intangible asset amortization | 16,674 | 17,709 | 34,018 | 35,717 | ||||||||||||||||
Restructuring / severance | 10,710 | 433 | 8,291 | 433 | ||||||||||||||||
Business acquisition / integration costs(1) | — | 3,329 | — | 6,828 | ||||||||||||||||
Adjusted operating income | $ | 209,326 | $ | 190,721 | 9.8% | $ | 413,291 | $ | 384,123 | 7.6% | ||||||||||
Operating margin | 33.3% | 32.9% | 34.1% | 33.4% | ||||||||||||||||
Adjusted operating margin(2) | 38.3% | 37.0% | 38.0% | 37.7% | ||||||||||||||||
Net income | $ | 140,940 | $ | 131,593 | 7.1 | % | $ | 289,495 | $ | 268,391 | 7.9 | % | ||||||||
Intangible asset amortization | 12,579 | 14,717 | 25,167 | 30,294 | ||||||||||||||||
Restructuring / severance | 8,080 | 360 | 6,134 | 360 | ||||||||||||||||
Business acquisition / integration costs(1) | — | 2,766 | — | 5,792 | ||||||||||||||||
Income tax items | 1,468 | (1,322) | 1,397 | (1,552) | ||||||||||||||||
Adjusted net income(3) | $ | 163,067 | $ | 148,114 | 10.1 | % | $ | 322,193 | $ | 303,285 | 6.2 | % | ||||||||
Net income | $ | 140,940 | $ | 131,593 | 7.1 | % | $ | 289,495 | $ | 268,391 | 7.9 | % | ||||||||
Interest expense | 16,599 | 16,737 | 33,337 | 33,274 | ||||||||||||||||
Income taxes | 27,705 | 25,169 | 54,346 | 46,256 | ||||||||||||||||
Depreciation and amortization expense | 31,582 | 26,211 | 58,650 | 52,208 | ||||||||||||||||
EBITDA | $ | 216,826 | $ | 199,710 | 8.6 | % | $ | 435,828 | $ | 400,129 | 8.9 | % | ||||||||
Non-recurring non-cash expenses(4) | 1,285 | — | 1,285 | — | ||||||||||||||||
Adjusted EBITDA | $ | 218,111 | $ | 199,710 | 9.2 | % | $ | 437,113 | $ | 400,129 | 9.2 | % | ||||||||
Diluted EPS | $ | 3.65 | $ | 3.38 | 8.0 | % | $ | 7.49 | $ | 6.89 | 8.7 | % | ||||||||
Intangible asset amortization | 0.32 | 0.37 | 0.64 | 0.78 | ||||||||||||||||
Restructuring / severance | 0.21 | 0.01 | 0.17 | 0.01 | ||||||||||||||||
Business acquisition / integration costs(1) | — | 0.07 | — | 0.15 | ||||||||||||||||
Income tax items | 0.04 | (0.03) | 0.04 | (0.04) | ||||||||||||||||
Adjusted Diluted EPS(3) | $ | 4.22 | $ | 3.80 | 11.1 | % | $ | 8.34 | $ | 7.79 | 7.1 | % | ||||||||
Weighted average common shares (Diluted) | 38,650 | 38,981 | 38,646 | 38,947 |
Six Months Ended | |||||||||||
February 29, | February 28, | ||||||||||
(dollar amounts in thousands) | 2024 | 2023 | % Change | ||||||||
Net cash provided by operating activities | $ | 298,942 | $ | 271,314 | 10.2 | % | |||||
Net cash provided by (used in) investing activities | (83,319) | (46,305) | 79.9 | % | |||||||
Net cash provided by (used in) financing activities | (259,227) | (285,654) | (9.3) | % | |||||||
Effect of exchange rate changes on cash and cash equivalents | (132) | 2,698 | (104.9) | % | |||||||
Net increase (decrease) in cash and cash equivalents | $ | (43,736) | $ | (57,947) | (24.5) | % |
Six Months Ended | |||||||||||
February 29, | February 28, | ||||||||||
(dollar amounts in thousands) | 2024 | 2023 | $ Change | ||||||||
Net cash provided by operating activities | $ | 298,942 | $ | 271,314 | $ | 27,628 | |||||
Less: purchases of property, equipment, leasehold improvements and capitalized internal-use software | (38,383) | (35,416) | (2,967) | ||||||||
Free cash flow | $ | 260,559 | $ | 235,898 | $ | 24,661 |
February 29, 2024 | August 31, 2023 | |||||||||||||
(in thousands) | Local Currency Amount | Notional Contract Amount (USD) | Local Currency Amount | Notional Contract Amount (USD) | ||||||||||
British Pound Sterling | £ | 42,400 | $ | 53,431 | £ | 45,000 | $ | 56,098 | ||||||
Indian Rupee | Rs | 4,391,942 | 52,400 | Rs | 3,363,150 | 40,300 | ||||||||
Euro | € | 43,700 | 47,960 | € | 39,000 | 42,646 | ||||||||
Philippine Peso | ₱ | 1,890,330 | 33,600 | ₱ | 1,888,541 | 33,600 | ||||||||
Total | $ | 187,391 | $ | 172,644 |
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Foreign currency forward contracts gain (loss) reclassified from AOCL into income | $ | (47) | $ | (279) | $ | 318 | $ | (5,244) |
Three Months Ended | Six Months Ended | |||||||||||||
February 29, | February 28, | February 29, | February 28, | |||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||
Foreign currency translation adjustment gains (losses) | $ | (2,956) | $ | 3,070 | $ | (1,048) | $ | 11,839 |
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 2023 | 39,024 | $ | 454.62 | 38,900 | $ | 222,404 | ||||||||
January 2024 | 38,250 | $ | 464.23 | 38,250 | $ | 204,647 | ||||||||
February 2024 | 37,775 | $ | 469.04 | 35,900 | $ | 187,835 | ||||||||
Total | 115,049 | 113,050 |
Incorporated by Reference | ||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit No. | Filing Date | Filed Herewith | ||||||||||||||
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, 2024 | /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, 2024 | |||||
/s/ F. PHILIP SNOW | |||||
F. Philip Snow | |||||
Chief Executive Officer |
Date: April 3, 2024 | |||||
/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, 2024 |
/s/ LINDA S. HUBER | |||||
Linda S. Huber | |||||
Executive Vice President, Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
April 3, 2024 |
Consolidated Statements of Income - Unaudited - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Income Statement [Abstract] | ||||
Revenues | $ 545,945 | $ 515,085 | $ 1,088,161 | $ 1,019,900 |
Operating expenses | ||||
Cost of services | 255,142 | 240,806 | 506,763 | 467,848 |
Selling, general and administrative | 108,807 | 104,582 | 209,518 | 210,178 |
Asset impairments | 54 | 447 | 898 | 729 |
Total operating expenses | 364,003 | 345,835 | 717,179 | 678,755 |
Operating income | 181,942 | 169,250 | 370,982 | 341,145 |
Other income (expense), net | ||||
Interest income | 2,847 | 2,903 | 5,859 | 5,108 |
Interest expense | (16,599) | (16,737) | (33,337) | (33,274) |
Other income (expense), net | 455 | 1,346 | 337 | 1,668 |
Total other income (expense), net | (13,297) | (12,488) | (27,141) | (26,498) |
Income before income taxes | 168,645 | 156,762 | 343,841 | 314,647 |
Provision for income taxes | 27,705 | 25,169 | 54,346 | 46,256 |
Net income | $ 140,940 | $ 131,593 | $ 289,495 | $ 268,391 |
Basic earnings per common share (in USD per share) | $ 3.70 | $ 3.44 | $ 7.61 | $ 7.03 |
Diluted earnings per common share (in USD per share) | $ 3.65 | $ 3.38 | $ 7.49 | $ 6.89 |
Basic weighted average common shares (in shares) | 38,103 | 38,281 | 38,059 | 38,201 |
Diluted weighted average common shares (in shares) | 38,650 | 38,981 | 38,646 | 38,947 |
Consolidated Statements of Comprehensive Income - Unaudited - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|||
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 140,940 | $ 131,593 | $ 289,495 | $ 268,391 | ||
Other comprehensive income (loss), net of tax | ||||||
Net unrealized gain (loss) on cash flow hedges | [1] | (1,186) | (2,254) | (2,840) | 4,301 | |
Foreign currency translation adjustment gains (losses) | (2,956) | 3,070 | (1,048) | 11,839 | ||
Other comprehensive income (loss) | (4,142) | 816 | (3,888) | 16,140 | ||
Comprehensive income | $ 136,798 | $ 132,409 | $ 285,607 | $ 284,531 | ||
|
Consolidated Statements of Comprehensive Income - Unaudited (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net unrealized gain (loss) on cash flow hedges, tax (benefit) expense | $ (419) | $ (779) | $ (1,007) | $ 1,485 |
Consolidated Balance Sheets - Unaudited (Parenthetical) - USD ($) $ in Thousands |
Feb. 29, 2024 |
Aug. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable reserve | $ 10,787 | $ 7,769 |
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) | 42,475,726 | 42,096,628 |
Common stock, outstanding (in shares) | 38,123,087 | 38,025,372 |
Treasury stock (in shares) | 4,352,639 | 4,071,256 |
Description of Business |
6 Months Ended |
---|---|
Feb. 29, 2024 | |
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 technologies that drive the investment community to see more, think bigger and do its best work. Our platform delivers expansive data, sophisticated analytics and flexible technology used by global financial professionals to power their critical investment workflows. As of February 29, 2024, we had more than 8,000 clients comprised of over 206,000 investment professionals, including institutional asset managers, bankers, wealth managers, asset owners, partners, hedge funds, corporate users and private equity and venture capital professionals. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected content, referred to as our "content refinery." Our products and services include workstations, portfolio analytics and enterprise solutions. We drive our business based on our detailed understanding of our clients' workflows, which helps us to solve their most complex challenges. We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas, as well as to analyze, monitor and manage their portfolios. Our on- and off-platform solutions span the investment life cycle of investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting. We provide open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions and application programming interfaces ("APIs"). Our CUSIP Global Services ("CGS") business supports security master files relied on by the investment industry for critical front, middle and back-office functions. Our platform and solutions are supported by our dedicated client service team. We operate our business through three reportable segments ("segments"): the Americas, EMEA and Asia Pacific. During fiscal 2024, we revised our internal organization within each segment to offer data, products and analytical applications by firm type: •"Institutional Buyside" focuses on asset managers, asset owners, and hedge fund companies, •"Dealmakers" focuses on banking and sell-side research, corporate, and private equity and venture capital workflows, •"Wealth" focuses on wealth management workflows, and •"Partnerships and CGS": "Partnerships" delivers solutions to content providers, financial exchanges, and rating agencies. "CGS" is the exclusive issuer of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers. As our chief operating decision maker ("CODM") continues to review our business and operating results based on our three segments, the Americas, EMEA and Asia Pacific, the realignment of our internal organization by firm type will not impact our segments for fiscal 2024. Refer to Note 15, Segment Information, for further discussion on our segments and CODM.
|
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Feb. 29, 2024 | |
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, 2023. 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 We presented the components of Interest expense, net separately as Interest income and Interest expense in the Consolidated Statements of Income for the three and six months ended February 29, 2024. We conformed the comparative figures for the three and six months ended February 28, 2023 to the current period 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 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 our assets and liabilities. Actual results could differ materially from those estimates. Concentrations of Credit Risk Credit risk arises from the potential nonperformance by counterparties to fulfill their financial obligations. Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of our cash and cash equivalents, accounts receivable, investments in mutual funds and derivative instruments. The maximum credit exposure of our cash and cash equivalents, accounts receivable and investments in mutual funds is their carrying values as of the balance sheet date. The maximum credit exposure related to our derivative instruments is based upon their respective gross fair values as of the balance sheet date. Cash and Cash Equivalents and Investments We are exposed to credit risk on our cash, cash equivalents and investments in mutual funds in the event of default by the governmental and financial institutions with which we transact. We invest in a manner that aligns with our restrictive cash investment practices, preserves capital and provides liquidity, while minimizing our exposure to credit risk. We limit our exposure to credit loss by investing with multiple governmental and financial institutions that we believe are high-quality and credit-worthy. We have not experienced any credit losses relating to our cash, cash equivalents and investments in mutual funds. Accounts Receivable Our accounts receivable credit risk is dependent upon the financial stability of our individual clients. As of February 29, 2024 and August 31, 2023, our accounts receivable reserve was $10.8 million and $7.8 million, respectively. We do not require collateral from our clients; however, no single client represented more than 3.5% of our total revenues in any period presented. Our concentration of credit risk related to our accounts receivable is generally limited, due to our large and geographically dispersed client base. 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 financial institutions we believe are credit-worthy 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. 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 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 29, 2024. Concentrations of Cloud Providers Our clients rely on us for the delivery of time-sensitive, up-to-date data and applications. Our business is dependent on our ability to process substantial volumes of data and transactions rapidly and efficiently. We currently use multiple providers of cloud services; however, one supplier provided the majority of our cloud computing support for the six months ended February 29, 2024. We maintain back-up facilities and other redundancies at our data centers, take security measures and have emergency planning procedures to minimize the risk that an event will disrupt our operations. 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 29, 2024 that had a material impact on our Consolidated Financial Statements. Accounting Pronouncements Not Yet Adopted Income Taxes - Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This ASU enhances annual income tax disclosures primarily related to our effective tax rate reconciliation and income taxes paid. The amendments in this ASU are to be applied prospectively, although retrospective application is permitted, and are effective for our annual financial statements starting in fiscal 2026. Early adoption is permitted. This ASU is not expected to have a material impact on our Consolidated Financial Statements. We are currently assessing the impact of the new requirements on our disclosures. Segment Reporting - Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. This ASU enhances segment disclosures primarily related to significant segment expenses for both interim and annual periods. The amendments in this ASU are to be applied retrospectively and are effective for our annual financial statements starting in fiscal 2025 and interim periods starting in fiscal 2026. Early adoption is permitted. This ASU is not expected to have a material impact on our Consolidated Financial Statements. We are currently assessing the impact of the new requirements on our disclosures. Disclosure Improvements - Codification Amendment in Response to the Securities and Exchange Commission's ("SEC") Disclosure Update and Simplification Initiative In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative. The ASU incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K. The amendments will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. As we are currently subject to these SEC requirements, this ASU is not expected to have a material impact on our Consolidated Financial Statements or related disclosures. No other new accounting pronouncements issued or effective as of February 29, 2024 have had, or are expected to have, a material impact on our Consolidated Financial Statements.
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Revenue Recognition |
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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 (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. We also derive revenues through our CGS platform, a subscription-based service that provides access to a database of universally recognized security identifiers and related descriptive data for issuers and their financial instruments (referred to as the "Identifier Platform"). The majority of each of our contracts with clients, whether for our Hosted Platform or 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. The primary nature of the promise to the client is to provide daily access to each of these data and analytics platforms over the associated contractual term. 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 respective platform. We recognize revenue for the majority of these platforms in accordance with the 'as invoiced' practical expedient, because the consideration that we have the right to invoice corresponds directly with the value of our performance to date. There are no significant judgments that would impact the timing of revenue recognition. Due to our election of the practical expedient, we do not consider payment terms as a financing component within a client contract when, at contract inception, the period between the transfer of the promised services to the client and the payment timing for those services will be one year or less. 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 our performance obligations completed to date. Therefore, we do not disclose the value of the remaining unsatisfied performance obligations. Disaggregated Revenues We disaggregate revenues from our client contracts by segment based on our clients' respective geographic locations. Our business segmentation by geography is aligned with the operational and economic characteristics of our business. Refer to Note 15, Segment Information, for further information. The following table presents revenues disaggregated by segment:
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Fair Value Measures |
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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, are permissible. The inputs to these methodologies consider market comparable information, taking into account the principal or most advantageous market in which we would transact, when pricing the asset or liability. Fair Value Hierarchy The accounting guidance for fair value measurements establishes a three-level 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. The hierarchy ranks the reliability of the inputs, based upon the lowest level of input that is significant to the fair value measurement, used to determine fair value. 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. We have categorized our assets and liabilities 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. The assumptions used in determining fair value represent our best estimates, but these estimates involve inherent uncertainties and the application of our judgment. As a result, if factors change, our fair value estimates could be materially different in the future and may adversely affect our business and financial results. (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 29, 2024, and August 31, 2023. We did not have any transfers between levels of fair value measurements during the six months ended February 29, 2024 and the fiscal year ended August 31, 2023.
(1) Our money market funds are readily convertible into cash. The net asset value of each fund on the last day of the reporting period is used to determine its fair value. Our 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 within the Consolidated Balance Sheets. (3) Our derivative instruments as of February 29, 2024 included our foreign exchange forward contracts and, as of August 31, 2023, included our foreign exchange forward contracts and our 2022 Swap Agreement. 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 agreement, 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. (4) Our contingent liability resulted from the acquisition of a business during fiscal 2023. This liability reflects the present value of potential future payments that are contingent upon the achievement of certain specified milestones. The acquisition date fair value of the contingent liability was $7.9 million and was valued using a scenario-based method. This method incorporates unobservable inputs and assumptions made by management, including the probability of achieving specified milestones, expected time until payment and the discount rate. The fair value of the contingent liability is remeasured each reporting period until the contingency is resolved, with any changes in fair value recorded in Selling, general and administrative ("SG&A") within the Consolidated Statements of Income. The change in the fair value of the contingent liability from the acquisition date through February 29, 2024 was driven by the passage of time, with no changes made to key assumptions used in our fair value estimates. (b) Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis Assets that are measured at fair value on a non-recurring basis primarily include our property, equipment and leasehold improvements ("PPE"), lease right-of-use ("ROU") assets, goodwill and intangible assets. These assets are assessed for impairment whenever events or circumstances indicate their carrying value may not be fully recoverable, and at least annually for goodwill. The fair values of these non-financial assets 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. (c) Assets and Liabilities Measured at Fair Value for Disclosure Purposes Only We elected not to carry our Long-term debt on the Consolidated Balance Sheets at fair value. The carrying value of our Long-term debt is net of related unamortized discounts and debt issuance costs. Our Long-term debt is comprised of our Senior Notes and 2022 Credit Facilities. Our Senior Notes are publicly traded; therefore, the fair value of our Senior Notes is estimated based on quoted prices in active markets as of the reporting date, 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 10, 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 29, 2024 and August 31, 2023:
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Derivative Instruments |
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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, 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 financial institutions we believe are credit-worthy. 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 swap agreements to mitigate certain operational exposures from the impact of changes in foreign currency exchange rates and to manage our floating interest rate exposure, respectively. For a derivative that was designated and qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recorded in Accumulated Other Comprehensive Loss ("AOCL"), net of tax, in the Consolidated Balance Sheets. Realized gains or losses resulting from settlement of our foreign currency forward contracts and interest rate swap agreements are subsequently reclassified into SG&A and Interest expense, respectively, in the Consolidated Statements of Income when the hedges are settled. All of our derivatives qualified and were designated as cash flow hedges, and none of our derivatives were deemed ineffective, during the six months ended February 29, 2024 and February 28, 2023. There was no discontinuance of our cash flow hedges during the six months ended February 29, 2024 and February 28, 2023, and as such, no corresponding gains or losses related to changes in the value of our contracts were reclassified into earnings prior to settlement. Foreign Currency Forward Contracts As we operate globally, we are exposed to the risk that our financial condition, results of operations and cash flows could be impacted by changes in foreign currency exchange rates. As of February 29, 2024, we maintained a series of foreign currency forward contracts to hedge a portion of our primary currency exposures, namely the British Pound Sterling, Indian Rupee, Euro and Philippine Peso. We entered into these contracts with the intent to hedge between 25% to 75% of the currency exposure related to our projected operating income in these primary currencies over their respective hedge periods. The hedge maturity periods range from the third quarter of fiscal 2024 through the second quarter of fiscal 2025. The following table summarizes the gross notional value of our foreign currency forward contracts to purchase the respective local currency with U.S. dollars as of:
Refer to 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 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") debt with a fixed interest rate of 1.162%. The notional amount of the 2022 Swap Agreement declined by $100.0 million on a quarterly basis beginning May 31, 2022. 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 prior to its maturity. The 2022 Swap Agreement matured on February 28, 2024. 2024 Swap Agreement On March 1, 2024, we entered into an interest rate swap agreement ("2024 Swap Agreement") with a notional amount of $200.0 million to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 5.145%. The notional amount of the 2024 Swap Agreement declines by $50.0 million on a quarterly basis beginning May 31, 2024 and matures on February 28, 2025. Refer to Note 10, Debt, for further discussion of our outstanding floating SOFR debt and refer to 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 our derivative instruments:
The following is a summary of the fair values of our derivative instruments:
Derivative Recognition The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended February 29, 2024 and February 28, 2023:
As of February 29, 2024, we estimate that net pre-tax derivative losses of $0.1 million included in AOCL will be reclassified into earnings within the next 12 months. As of February 29, 2024, our cash flow hedges were highly effective with no amount of ineffectiveness recorded in the Consolidated Statements of Income. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. 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 29, 2024 and August 31, 2023, there were no material amounts recorded net in the Consolidated Balance Sheets.
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Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | GOODWILL Changes in the carrying value of goodwill by segment for the six months ended February 29, 2024 are as follows:
Goodwill is not amortized as it is estimated to have an indefinite life. Goodwill impairment is tested at the reporting unit level, which is consistent with our reportable segments. We test goodwill annually during the fourth quarter of each fiscal year or more frequently if events and circumstances occur indicating that it is more likely than not that the fair value of any one of our reporting units is less than its respective carrying value. If the carrying value of the reporting unit exceeds the fair value, then the goodwill is considered impaired and written down to the reporting unit’s fair value. We tested our goodwill for impairment during the fourth quarter of fiscal 2023 utilizing a quantitative analysis. We elected to bypass the optional qualitative assessment and concluded there was no impairment as the fair value of each of our reporting units exceeded its carrying value. Our goodwill impairment test performed during the fourth quarter of fiscal 2022 utilized a qualitative analysis and concluded there was no impairment as it was more likely than not that the fair value of each of our reporting units was not less than its respective carrying value.
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Intangible Assets |
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Intangible Assets | INTANGIBLE ASSETS We amortize intangible assets on a straight line basis over their estimated useful lives. The following table presents the estimated useful life, gross carrying amounts and accumulated amortization totals related to our identifiable intangible assets as of February 29, 2024 and August 31, 2023:
The weighted average useful life of our intangible assets as of February 29, 2024 was 32.1 years. Intangible assets are tested for impairment qualitatively on a quarterly basis or whenever events or changes in circumstances indicate that the carrying amount of an asset group is not recoverable. If indicators of impairment are present, our intangible assets are tested for impairment by comparing the carrying value to undiscounted cash flows and, if impaired, written down to fair value based on discounted cash flows. We did not identify a material impairment nor a material change to the estimated remaining useful lives of our intangible assets during the six months ended February 29, 2024 and February 28, 2023. Our intangible assets have no assigned residual values. The following table presents the amortization expense for our intangible assets which is included in Cost of services in our Consolidated Statements of Income:
As of February 29, 2024, estimated intangible asset amortization expense for each of the next five years and thereafter is as follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES We are subject to taxation in the United States and various foreign jurisdictions in which we conduct our business. Income 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 carrying amounts and the tax basis of our assets and liabilities using currently enacted tax rates. Income Taxes Provision and Effective Tax Rate The provision for income taxes and the effective tax rate are as follows:
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. Our effective tax rate for the three and six months ended February 29, 2024 was lower than the applicable U.S. corporate income tax rate mainly due to a net tax benefit from the employee exercise of stock options, research and development ("R&D") tax credits and utilization of foreign tax credits, partially offset by our state taxes. For the three and six months ended February 28, 2023, our effective tax rate was lower than the applicable U.S. corporate income tax rate mainly due to R&D tax credits, a foreign derived intangible income ("FDII") deduction and a net tax benefit from the employee exercise of stock options. Our effective tax rate for the three months ended February 29, 2024 was higher than for the three months ended February 28, 2023, mainly driven by higher pretax income at applicable statutory tax rates and a higher overall foreign tax rate, partially offset by an increase in the exercise of stock options and increased utilization of foreign tax credits. Our effective tax rate for the six months ended February 29, 2024 was higher than for the six months ended February 28, 2023, mainly driven by higher pretax income at applicable statutory tax rates and a higher overall foreign tax rate, partially offset by increased utilization of foreign tax credits. Undistributed Foreign Earnings We permanently reinvest all foreign undistributed earnings, except in jurisdictions where earnings can be repatriated substantially free of tax. It is not practicable to determine the deferred tax liability that would be payable if these earnings were repatriated to the U.S. 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. We do not expect this revision to have a material impact on our Consolidated Financial Statements.
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Leases |
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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 incremental borrowing rate ("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 lease and non-lease components as a single lease component, which we recognize over the expected lease 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 29, 2024, we recognized $133.9 million of Lease ROU assets, net and $214.7 million of combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets. Our leases have a remaining lease term ranging from less than one year to just under 12 years and do not include any renewal or termination options that were not reasonably certain to be exercised. The following table presents our future minimum lease payments and a reconciliation to the combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets as of February 29, 2024:
The following table includes components of our occupancy costs:
(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 we elected. (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 weighted average remaining lease term and weighted average discount rate related to our 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 respective 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.
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Debt |
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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 discounts and debt issuance costs. Our total debt obligations as of February 29, 2024 and August 31, 2023 consisted of the following:
As of February 29, 2024, annual maturities on our total debt obligations, based on contractual maturity date, 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. From the borrowing date through November 30, 2023, the commitment fee was 0.125%, which subsequently decreased to 0.1% through February 29, 2024. We used these borrowings, along with the net proceeds from the issuance of the Senior Notes (as defined below) and cash on hand, to finance the consideration for the CGS acquisition, to repay prior outstanding borrowings and to pay related transaction fees, costs and expenses. 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 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 29, 2024, we repaid $62.5 million and $125.0 million, respectively, under the 2022 Term Facility, inclusive of voluntary prepayments of $50.0 million and $100.0 million, respectively. Since loan inception on March 1, 2022, we have repaid $750.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $662.5 million. From the borrowing date through November 30, 2023, the outstanding borrowings under the 2022 Credit Facilities bore interest at a rate equal to the applicable one-month Term SOFR plus a 1.1% spread (comprised of a 1.0% interest rate margin based on a debt leverage pricing grid plus a 0.1% credit spread adjustment). From December 1, 2023 through February 29, 2024, the spread decreased to 0.975% (comprised of a 0.875% interest rate margin based on a debt leverage pricing grid plus a 0.1% credit spread adjustment). Interest on the 2022 Credit Facilities is currently payable on the last business day of each month, in arrears. 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 3.75 to 1.00 as of February 29, 2024. We were in compliance with all covenants and requirements of the 2022 Credit Agreement as of February 29, 2024. Swap Agreements 2022 Swap Agreement On March 1, 2022, we entered into the 2022 Swap Agreement to hedge a portion of our outstanding floating SOFR 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. The 2022 Swap Agreement matured on February 28, 2024. 2024 Swap Agreement On March 1, 2024, we entered into the 2024 Swap Agreement to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 5.145%. Refer to Note 5, Derivative Instruments for further discussion of the 2022 Swap Agreement and the 2024 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 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 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. 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. Interest Expense The following table presents the interest expense on our outstanding debt which is a component of Interest expense 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 2022 Swap Agreement.
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Commitments and Contingencies |
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Feb. 29, 2024 | |
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 the 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 10, Income Taxes in the Notes to the Consolidated Financial Statements included in Part II, Item 8. of our Annual Report on Form 10-K for the fiscal year ended August 31, 2023 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. As of August 31, 2023, we had total purchase obligations with suppliers of $362.2 million. Our total purchase obligations as of August 31, 2023 primarily related to hosting services, acquisition of data, and, to a lesser extent, third-party software providers. Hosting services support our hybrid cloud strategy, which relies in large part on third-party hosting providers. Data is an integral component of the value we provide to our clients. Our commitments to third-party software providers mainly include internal-use software licenses. For the six months ended February 29, 2024, there were no material changes to our purchase obligations. We also have contractual obligations related to our lease liabilities and outstanding debt. Refer to Note 9, Leases and Note 10, Debt for information regarding lease commitments and outstanding debt obligations, respectively. Capital Commitments As of February 29, 2024 and August 31, 2023, we had outstanding capital commitments related to an investment of $0.6 million and $0.7 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 February 29, 2024 and August 31, 2023, we had $0.5 million and $0.6 million of standby letters of credit outstanding, respectively. No liabilities related to these arrangements are reflected in the Consolidated Balance Sheets. Our 2022 Revolving Facility allows for the availability of up to $100.0 million in the form of letters of credit. We have not obtained any letters of credit under the 2022 Revolving Facility since its inception. Refer to Note 10, Debt, for information regarding the 2022 Revolving Facility. 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 29, 2024, 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 As a multinational company operating in many states and countries, we are routinely audited by various taxing 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 consolidated financial position, results of operations or 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 requested pre-assessment conferences with the Department of Revenue's Office of Appeals to appeal the Notices, and on May 24, 2023, we received a Letter of Determination from the Commonwealth upholding the Notices, along with a Notice of Assessment for all the periods covered by the Notices. On June 22, 2023, we filed an Application for Abatement with the Commonwealth disputing all amounts assessed, which was subsequently denied. On February 20, 2024, we received a “Notice of Selection for Audit” for sales tax for the period from July 1, 2021 through December 31, 2023. We have filed petitions with the Appellate Tax Board to appeal all amounts assessed by the Commonwealth and believe that we will ultimately prevail; however, if we do not prevail, the amount of these assessments could have a material impact on our consolidated financial position, results of operations and cash flows. We have concluded that some 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. 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.
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Stockholders' Equity | STOCKHOLDERS' EQUITY Share Repurchases
(1) Amounts do not include repurchases of common stock primarily to satisfy tax withholding obligations due upon vesting of stock-based awards of 1,999 shares ($1.0 million) and 1,853 shares ($0.8 million) during the three months ended February 29, 2024 and February 28, 2023, respectively, and 32,383 shares ($14.5 million) and 27,713 shares ($11.8 million) during the six months ended February 29, 2024 and February 28, 2023, respectively. We may repurchase shares of our common stock under our share repurchase program from time-to-time in the open market or via privately negotiated transactions, subject to market conditions. We suspended our share repurchase program beginning in the second quarter of fiscal 2022 through the second quarter of fiscal 2023 to prioritize the repayment of debt under the 2022 Credit Facilities. As such, we did not repurchase any shares of our common stock under the share repurchase program during the three and six months ended February 28, 2023. There is no defined number of shares to be repurchased over a specified timeframe through the life of our share repurchase program. As of February 29, 2024, we had $187.8 million authorized under our share repurchase program for future share repurchases. Refer to Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, of this Quarterly Report on Form 10-Q for further discussion on our share repurchase program. Equity-based Awards Refer to Note 14, Stock-Based Compensation for more information on equity awards issued during the three and six months ended February 29, 2024 and February 28, 2023. Dividends Our Board of Directors approved the following dividends:
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 as of February 29, 2024 and August 31, 2023 were as follows:
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Earnings Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE Basic earnings per common share ("Basic EPS") is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted earnings per common 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. A reconciliation of the weighted average shares outstanding used in the Basic EPS and Diluted EPS computation is as follows:
Stock options that were 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 as their impact was antidilutive. The following table presents those awards that were excluded from Diluted EPS for the periods presented:
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Stock-Based Compensation |
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Stock-Based Compensation | STOCK-BASED COMPENSATION Our stock-based awards include stock options, restricted stock units ("RSUs"), PSUs and common stock purchased by eligible employees under our employee stock purchase plan ("ESPP"). We measure and recognize stock-based compensation for all stock-based awards granted to our employees and our non-employee members of the Board of Directors ("non-employee directors") based on their estimated grant date fair value. To estimate the grant date fair value, we utilize a lattice-binomial option-pricing model ("binomial model") for our employee stock options and the Black-Scholes model for non-employee director stock options and common stock purchased by eligible employees under our ESPP. For RSUs and PSUs (collectively, "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 future dividend payments on the underlying stock during the requisite service period. The number of PSUs granted assumes target-level achievement of the specified performance levels within the payout range. The ultimate number of common shares that may be earned from a PSU is determined based on the actual achievement of the specified performance levels within the payout range. Stock-based compensation expense for stock option and RSU awards is recognized over the requisite service period using the straight-line method. For granted stock options and RSUs, the amount of stock-based compensation expense recognized on any date is at least equal to the vested portion of the award on that date. Our PSUs require us to make assumptions regarding the probability of achieving specified performance levels established at the time of grant and we recognize stock-based compensation expense using the straight-line method over the requisite service period. The probability of achieving the specified performance levels is reviewed on a quarterly basis to ensure the amount of stock-based compensation expense appropriately reflects the expected achievement. 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 for the November 2022 annual grant and 0% to 200% of the number of target shares for the November 2023 annual grant, depending on the level of our achievement of stated financial performance objectives. For our ESPP, stock-based compensation expense is recognized on a straight-line basis over the offering period. Stock-based awards are subject to the continued employment and continued service at the time of vesting by employees and non-employee directors, respectively. 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. The following table presents the stock-based compensation for the periods presented:
There were no stock-based compensation costs capitalized in any periods presented. As of February 29, 2024, $151.8 million of total unrecognized compensation expense related to non-vested stock-based awards is expected to be recognized over a weighted average vesting period of 3.1 years. As of February 29, 2024, we had 3.7 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"). Employee Stock Option Awards Our annual employee stock option grant, made during the first quarter of each fiscal year, makes up the majority of our stock options granted under the LTIP in each fiscal year. The following table presents the employee stock options granted under the LTIP for the six months ended February 29, 2024 and February 28, 2023:
(1) Includes the annual employee grant on November 1, 2023 and November 1, 2022 of 242,371 and 266,051 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, 2023 annual employee grant, the estimated grant date fair value, using the binomial model, leveraged the following assumptions:
Employee Restricted Stock Awards Restricted Stock Awards are granted to our employees under the LTIP. These awards entitle the holders to shares of common stock as the Restricted Stock Awards vest, but not to dividends declared on the underlying shares while the stock subject to the Restricted Stock Awards is unvested. Our Restricted Stock Awards granted during the six months ended February 29, 2024 and February 28, 2023, primarily related to our annual grants on November 1, 2023 and November 1, 2022, respectively, and were as follows:
(1) The majority of the RSUs granted vest 20% annually on the anniversary date of the grant and are fully vested after five years. (2) The majority of the PSUs granted 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 for the November 2022 annual grant and 0% to 200% of the number of target shares for the November 2023 annual grant, depending on the level of our achievement of stated financial performance objectives. (3) For the three months ended February 29, 2024 and February 28, 2023, additional PSUs were granted based on performance above the specified target level of achievement for PSUs granted on November 9, 2020 and November 1, 2019, respectively. 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 for each calendar year. 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 both the three months ended February 29, 2024 and February 28, 2023. Stock-based compensation expense related to our ESPP was $1.2 million for the six months ended February 29, 2024 and $1.3 million for the six months ended February 28, 2023. As of February 29, 2024, our ESPP had 45,503 shares reserved for future issuance.
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Segment Information |
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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 CODM for resource allocation decisions and performance assessment, and (iii) their discrete financial information is available. Our Chief Executive Officer functions as our CODM. We have three operating segments: Americas, EMEA and Asia Pacific. This is how our CODM manages our business and the geographic markets in which we operate. These operating segments are consistent with our reportable segments. 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 Australasia. 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 expenses incurred at our content collection centers, located in India, the Philippines and Latvia, are allocated to each segment based on their respective percentage of revenues as this reflects the benefits provided by each segment. The following tables reflect the results of operations of our segments:
(1) Capital expenditures includes purchases of property, equipment and leasehold improvements and capitalized internal-use software. Segment Total Assets The following table reflects the total assets for our segments as of:
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
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Pay vs Performance Disclosure | ||||
Net income | $ 140,940 | $ 131,593 | $ 289,495 | $ 268,391 |
Insider Trading Arrangements |
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Feb. 29, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2023. 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.
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Reclassifications | Reclassifications We presented the components of Interest expense, net separately as Interest income and Interest expense in the Consolidated Statements of Income for the three and six months ended February 29, 2024. We conformed the comparative figures for the three and six months ended February 28, 2023 to the current period presentation.
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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 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 our assets and liabilities. Actual results could differ materially from those estimates.
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Concentrations of Credit Risk, Data Providers and Cloud Providers | Concentrations of Credit Risk Credit risk arises from the potential nonperformance by counterparties to fulfill their financial obligations. Our financial instruments that potentially subject us to concentrations of credit risk consist primarily of our cash and cash equivalents, accounts receivable, investments in mutual funds and derivative instruments. The maximum credit exposure of our cash and cash equivalents, accounts receivable and investments in mutual funds is their carrying values as of the balance sheet date. The maximum credit exposure related to our derivative instruments is based upon their respective gross fair values as of the balance sheet date. Cash and Cash Equivalents and Investments We are exposed to credit risk on our cash, cash equivalents and investments in mutual funds in the event of default by the governmental and financial institutions with which we transact. We invest in a manner that aligns with our restrictive cash investment practices, preserves capital and provides liquidity, while minimizing our exposure to credit risk. We limit our exposure to credit loss by investing with multiple governmental and financial institutions that we believe are high-quality and credit-worthy. We have not experienced any credit losses relating to our cash, cash equivalents and investments in mutual funds. Accounts Receivable Our accounts receivable credit risk is dependent upon the financial stability of our individual clients. As of February 29, 2024 and August 31, 2023, our accounts receivable reserve was $10.8 million and $7.8 million, respectively. We do not require collateral from our clients; however, no single client represented more than 3.5% of our total revenues in any period presented. Our concentration of credit risk related to our accounts receivable is generally limited, due to our large and geographically dispersed client base. 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 financial institutions we believe are credit-worthy 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. 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 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 29, 2024. Concentrations of Cloud Providers Our clients rely on us for the delivery of time-sensitive, up-to-date data and applications. Our business is dependent on our ability to process substantial volumes of data and transactions rapidly and efficiently. We currently use multiple providers of cloud services; however, one supplier provided the majority of our cloud computing support for the six months ended February 29, 2024. We maintain back-up facilities and other redundancies at our data centers, take security measures and have emergency planning procedures to minimize the risk that an event will disrupt our operations.
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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 29, 2024 that had a material impact on our Consolidated Financial Statements. Accounting Pronouncements Not Yet Adopted Income Taxes - Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This ASU enhances annual income tax disclosures primarily related to our effective tax rate reconciliation and income taxes paid. The amendments in this ASU are to be applied prospectively, although retrospective application is permitted, and are effective for our annual financial statements starting in fiscal 2026. Early adoption is permitted. This ASU is not expected to have a material impact on our Consolidated Financial Statements. We are currently assessing the impact of the new requirements on our disclosures. Segment Reporting - Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. This ASU enhances segment disclosures primarily related to significant segment expenses for both interim and annual periods. The amendments in this ASU are to be applied retrospectively and are effective for our annual financial statements starting in fiscal 2025 and interim periods starting in fiscal 2026. Early adoption is permitted. This ASU is not expected to have a material impact on our Consolidated Financial Statements. We are currently assessing the impact of the new requirements on our disclosures. Disclosure Improvements - Codification Amendment in Response to the Securities and Exchange Commission's ("SEC") Disclosure Update and Simplification Initiative In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative. The ASU incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K. The amendments will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. As we are currently subject to these SEC requirements, this ASU is not expected to have a material impact on our Consolidated Financial Statements or related disclosures. No other new accounting pronouncements issued or effective as of February 29, 2024 have had, or are expected to have, a material impact on our Consolidated Financial Statements.
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Revenue Recognition (Tables) |
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Schedule of disaggregation of revenue | The following table presents revenues disaggregated by segment:
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Fair Value Measures (Tables) |
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Feb. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 29, 2024, and August 31, 2023. We did not have any transfers between levels of fair value measurements during the six months ended February 29, 2024 and the fiscal year ended August 31, 2023.
(1) Our money market funds are readily convertible into cash. The net asset value of each fund on the last day of the reporting period is used to determine its fair value. Our 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 within the Consolidated Balance Sheets. (3) Our derivative instruments as of February 29, 2024 included our foreign exchange forward contracts and, as of August 31, 2023, included our foreign exchange forward contracts and our 2022 Swap Agreement. 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 agreement, 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. (4) Our contingent liability resulted from the acquisition of a business during fiscal 2023. This liability reflects the present value of potential future payments that are contingent upon the achievement of certain specified milestones. The acquisition date fair value of the contingent liability was $7.9 million and was valued using a scenario-based method. This method incorporates unobservable inputs and assumptions made by management, including the probability of achieving specified milestones, expected time until payment and the discount rate. The fair value of the contingent liability is remeasured each reporting period until the contingency is resolved, with any changes in fair value recorded in Selling, general and administrative ("SG&A") within the Consolidated Statements of Income. The change in the fair value of the contingent liability from the acquisition date through February 29, 2024 was driven by the passage of time, with no changes made to key assumptions used in our fair value estimates.
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Schedule of assets and liabilities measured at carrying value and fair value | The following table summarizes information on our outstanding debt as of February 29, 2024 and August 31, 2023:
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Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of gross notional values of derivative instruments | The following table summarizes the gross notional value of our foreign currency forward contracts to purchase the respective local currency with U.S. dollars as of:
The following is a summary of the gross notional values of our derivative instruments:
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Summary of the fair values of derivative instruments | The following is a summary of the fair values of our derivative instruments:
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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 29, 2024 and February 28, 2023:
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Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill | Changes in the carrying value of goodwill by segment for the six months ended February 29, 2024 are as follows:
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Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of identifiable intangible assets | The following table presents the estimated useful life, gross carrying amounts and accumulated amortization totals related to our identifiable intangible assets as of February 29, 2024 and August 31, 2023:
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Schedule of amortization expense | The following table presents the amortization expense for our intangible assets which is included in Cost of services in our Consolidated Statements of Income:
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Schedule of estimated intangible asset amortization expense | As of February 29, 2024, estimated intangible asset amortization expense for each of the next five years and thereafter is as follows:
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Income Taxes (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income taxes and effective tax rate | The provision for income taxes and the effective tax rate are as follows:
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Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum commitments | The following table presents our future minimum lease payments and a reconciliation to the combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets as of February 29, 2024:
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Schedule of lease cost and other information related to leases | The following table includes components of our occupancy costs:
(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 we elected. (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 weighted average remaining lease term and weighted average discount rate related to our 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 respective 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.
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Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt obligations | Our total debt obligations as of February 29, 2024 and August 31, 2023 consisted of the following:
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Schedule of annual maturities of debt obligations | As of February 29, 2024, annual maturities on our total debt obligations, based on contractual maturity date, were as follows:
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Schedule of interest expense | The following table presents the interest expense on our outstanding debt which is a component of Interest expense 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 2022 Swap Agreement.
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Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share repurchases | Share Repurchases
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Schedule of dividends declared | Our Board of Directors approved the following dividends:
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Schedule of components of AOCL | The components of AOCL as of February 29, 2024 and August 31, 2023 were as follows:
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | A reconciliation of the weighted average shares outstanding used in the Basic EPS and Diluted EPS computation is as follows:
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Schedule of awards excluded from diluted EPS | The following table presents those awards that were excluded from Diluted EPS for the periods presented:
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Stock-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock-based compensation | The following table presents the stock-based compensation for the periods presented:
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Schedule of stock option activity | The following table presents the employee stock options granted under the LTIP for the six months ended February 29, 2024 and February 28, 2023:
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Schedule of assumptions about stock options | As part of the November 1, 2023 annual employee grant, the estimated grant date fair value, using the binomial model, leveraged the following assumptions:
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Schedule of restricted stock awards activity | Our Restricted Stock Awards granted during the six months ended February 29, 2024 and February 28, 2023, primarily related to our annual grants on November 1, 2023 and November 1, 2022, respectively, and were as follows:
(1) The majority of the RSUs granted vest 20% annually on the anniversary date of the grant and are fully vested after five years. (2) The majority of the PSUs granted 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 for the November 2022 annual grant and 0% to 200% of the number of target shares for the November 2023 annual grant, depending on the level of our achievement of stated financial performance objectives. (3) For the three months ended February 29, 2024 and February 28, 2023, additional PSUs were granted based on performance above the specified target level of achievement for PSUs granted on November 9, 2020 and November 1, 2019, respectively.
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Segment Information (Tables) |
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Feb. 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information | The following tables reflect the results of operations of our segments:
(1) Capital expenditures includes purchases of property, equipment and leasehold improvements and capitalized internal-use software. Segment Total Assets The following table reflects the total assets for our segments as of:
|
Description of Business (Details) |
6 Months Ended |
---|---|
Feb. 29, 2024
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Feb. 29, 2024 |
Aug. 31, 2023 |
|
Accounting Policies [Abstract] | ||
Accounts receivable reserve | $ 10,787 | $ 7,769 |
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. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 545,945 | $ 515,085 | $ 1,088,161 | $ 1,019,900 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 352,618 | 331,121 | 700,985 | 654,488 |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 139,176 | 132,508 | 278,737 | 263,246 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 54,151 | $ 51,456 | $ 108,439 | $ 102,166 |
Derivative Instruments - Gross Notional Values (Details) - Cash flow hedging - Designated as hedging instrument - USD ($) $ in Thousands |
Feb. 29, 2024 |
Aug. 31, 2023 |
Mar. 01, 2022 |
---|---|---|---|
Derivative [Line Items] | |||
Gross notional amount | $ 187,391 | $ 372,644 | |
Foreign currency forward contracts | |||
Derivative [Line Items] | |||
Gross notional amount | 187,391 | 172,644 | |
Interest rate swap agreement | |||
Derivative [Line Items] | |||
Gross notional amount | $ 0 | $ 200,000 | $ 800,000 |
Derivative Instruments - Pre-Tax Effect of Cash Flow Hedging Relationships (Details) - Cash flow hedging - Designated as hedging instrument - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (Loss) Recognized in AOCL on Derivatives | $ (606) | $ 633 | $ (379) | $ 7,384 |
Gain (Loss) Reclassified from AOCL into Income | 999 | 3,666 | 3,468 | 1,598 |
Foreign currency forward contracts | SG&A | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (Loss) Recognized in AOCL on Derivatives | (623) | (215) | (406) | 3,108 |
Gain (Loss) Reclassified from AOCL into Income | (47) | (279) | 318 | (5,244) |
Interest rate swap agreement | Interest expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (Loss) Recognized in AOCL on Derivatives | 17 | 848 | 27 | 4,276 |
Gain (Loss) Reclassified from AOCL into Income | $ 1,046 | $ 3,945 | $ 3,150 | $ 6,842 |
Goodwill - Changes in the Carrying Amount of Goodwill by Segment (Details) $ in Thousands |
6 Months Ended |
---|---|
Feb. 29, 2024
USD ($)
| |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,004,736 |
Acquisitions | 181 |
Foreign currency translations | (1,034) |
Ending balance | 1,003,883 |
Americas | |
Goodwill [Roll Forward] | |
Beginning balance | 704,759 |
Acquisitions | 181 |
Foreign currency translations | 0 |
Ending balance | 704,940 |
EMEA | |
Goodwill [Roll Forward] | |
Beginning balance | 297,734 |
Acquisitions | 0 |
Foreign currency translations | (967) |
Ending balance | 296,767 |
Asia Pacific | |
Goodwill [Roll Forward] | |
Beginning balance | 2,243 |
Acquisitions | 0 |
Foreign currency translations | (67) |
Ending balance | $ 2,176 |
Goodwill - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Aug. 31, 2023 |
Aug. 31, 2022 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment loss | $ 0 | $ 0 |
Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Weighted average useful life (in years) | 32 years 1 month 6 days | |
Impairment of intangible assets | $ 0.0 | $ 0.0 |
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 26,688 | $ 21,782 | $ 48,853 | $ 43,436 |
Intangible Assets - Estimated Intangible Asset Amortization Expense (Details) - USD ($) $ in Thousands |
Feb. 29, 2024 |
Aug. 31, 2023 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 (remaining six months) | $ 53,369 | |
2025 | 102,958 | |
2026 | 95,323 | |
2027 | 72,779 | |
2028 | 63,279 | |
Thereafter | 1,472,901 | |
Total | $ 1,860,609 | $ 1,859,202 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 168,645 | $ 156,762 | $ 343,841 | $ 314,647 |
Provision for income taxes | $ 27,705 | $ 25,169 | $ 54,346 | $ 46,256 |
Effective tax rate | 16.40% | 16.10% | 15.80% | 14.70% |
Leases - Narrative (Details) - USD ($) $ in Thousands |
Feb. 29, 2024 |
Aug. 31, 2023 |
---|---|---|
Lessee, Lease, Description [Line Items] | ||
ROU assets | $ 133,917 | $ 141,837 |
Lease liabilities | $ 214,724 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms (in years) | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms (in years) | 12 years |
Leases - Future Minimum Commitments (Details) $ in Thousands |
Feb. 29, 2024
USD ($)
|
---|---|
Leases [Abstract] | |
2024 (remaining six months) | $ 19,037 |
2025 | 38,022 |
2026 | 37,658 |
2027 | 36,339 |
2028 | 31,771 |
Thereafter | 88,843 |
Total minimum lease payments | 251,670 |
Less: Imputed interest | 36,946 |
Total lease liabilities | $ 214,724 |
Leases - Lease Cost And Other Information Related to Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
Aug. 31, 2023 |
|
Leases [Abstract] | |||||
Operating lease costs | $ 7,645 | $ 8,156 | $ 15,263 | $ 16,233 | |
Variable lease costs | $ 4,817 | $ 3,834 | $ 9,306 | 8,054 | |
Weighted average remaining lease term (in years) | 7 years 4 months 24 days | 7 years 4 months 24 days | 7 years 9 months 18 days | ||
Weighted average discount rate (incremental borrowing rate) | 4.60% | 4.60% | 4.50% | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 19,811 | 19,596 | |||
Lease ROU assets obtained in exchange for lease liabilities | 2,313 | 1,379 | |||
Reductions to ROU assets resulting from reductions to lease liabilities | $ (23) | $ 0 |
Debt - Debt Obligations (Details) - USD ($) $ in Thousands |
Feb. 29, 2024 |
Aug. 31, 2023 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,500,000 | |
Total unamortized discounts and debt issuance costs | (10,512) | $ (12,300) |
Total net carrying value of debt | 1,489,488 | 1,612,700 |
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 | 250,000 | 375,000 |
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. 29, 2024
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2024 (remaining six months) | $ 0 |
2025 | 250,000 |
2026 | 0 |
2027 | 750,000 |
2028 | 0 |
Thereafter | 500,000 |
Total net carrying value of debt | $ 1,500,000 |
Debt - Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Debt Disclosure [Abstract] | ||||
Interest expense on outstanding debt | $ 16,589 | $ 16,728 | $ 33,318 | $ 33,256 |
Commitments and Contingencies (Details) - USD ($) |
Feb. 29, 2024 |
Aug. 31, 2023 |
Mar. 01, 2022 |
---|---|---|---|
Concentration Risk [Line Items] | |||
Purchase commitment, remaining minimum amount committed | $ 362,200,000 | ||
Letters of credit outstanding | $ 500,000 | 600,000 | |
Letter of Credit | 2022 Credit Agreement | Line of Credit | |||
Concentration Risk [Line Items] | |||
Maximum borrowing capacity | $ 100,000,000.0 | ||
Capital Commitment | |||
Concentration Risk [Line Items] | |||
Capital commitments | $ 600,000 | $ 700,000 |
Stockholders' Equity - Share Repurchases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Equity [Abstract] | ||||
Repurchases of common stock under the share repurchase program (in shares) | 113,050 | 0 | 249,000 | 0 |
Total cost of shares repurchased | $ 52,255 | $ 0 | $ 112,165 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Remaining authorized repurchase amount | $ 187,800 | $ 187,800 | ||
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares repurchased from employees (in shares) | 1,999 | 1,853 | 32,383 | 27,713 |
Value of shares repurchased in settlement of employee tax withholding obligations | $ 1,000 | $ 800 | $ 14,500 | $ 11,800 |
Stockholders' Equity - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Feb. 29, 2024 |
Nov. 30, 2023 |
Feb. 28, 2023 |
Nov. 30, 2022 |
|
Equity [Abstract] | ||||
Dividends per Share of Common Stock (in USD per share) | $ 0.98 | $ 0.98 | $ 0.89 | $ 0.89 |
Total Amount | $ 37,360 | $ 37,299 | $ 34,099 | $ 34,010 |
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
Feb. 29, 2024 |
Nov. 30, 2023 |
Aug. 31, 2023 |
Feb. 28, 2023 |
Nov. 30, 2022 |
Aug. 31, 2022 |
---|---|---|---|---|---|---|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total AOCL | $ 1,801,754 | $ 1,700,740 | $ 1,619,930 | $ 1,607,154 | $ 1,474,128 | $ 1,331,408 |
Accumulated Other Comprehensive Loss | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total AOCL | (91,029) | $ (86,887) | (87,141) | $ (92,243) | $ (93,059) | $ (108,383) |
Accumulated unrealized gains (losses) on cash flow hedges, net of tax | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total AOCL | 40 | 2,880 | ||||
Accumulated foreign currency translation adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total AOCL | $ (91,069) | $ (90,021) |
Earnings Per Share - Weighted Average Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Numerator | ||||
Net income used for calculating Basic EPS | $ 140,940 | $ 131,593 | $ 289,495 | $ 268,391 |
Net income used for calculating Diluted EPS | $ 140,940 | $ 131,593 | $ 289,495 | $ 268,391 |
Denominator | ||||
Weighted average common shares used in the calculation of Basic EPS (in shares) | 38,103 | 38,281 | 38,059 | 38,201 |
Common stock equivalents associated with stock-based compensation plan (in shares) | 547 | 700 | 587 | 746 |
Shares used in the calculation of Diluted EPS (in shares) | 38,650 | 38,981 | 38,646 | 38,947 |
Basic EPS (in USD per share) | $ 3.70 | $ 3.44 | $ 7.61 | $ 7.03 |
Diluted EPS (in USD per share) | $ 3.65 | $ 3.38 | $ 7.49 | $ 6.89 |
Earnings Per Share - Awards Excluded from Diluted EPS (Details) - shares shares in Thousands |
6 Months Ended | |
---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Out-of-the-money stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 0 | 543 |
PSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 95 | 93 |
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Share-Based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense | $ 16,652 | $ 15,325 | $ 30,962 | $ 27,500 |
Stock-Based Compensation - Stock Option Activity (Details) - Employee - $ / shares |
6 Months Ended | |||
---|---|---|---|---|
Nov. 01, 2023 |
Nov. 01, 2022 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted (in shares) | 242,371 | 266,051 | 243,125 | 267,641 |
Weighted average exercise price (in USD per share) | $ 436.63 | $ 426.25 | ||
Weighted average grant date fair value (in USD per share) | $ 132.60 | $ 125.58 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average exercise price (in USD per share) | $ 436.57 | |||
Weighted average grant date fair value (in USD per share) | $ 132.60 | |||
Vesting (as a percent) | 20.00% | 20.00% | ||
Vesting period (in years) | 5 years | 5 years | ||
Expiration period (in years) | 10 years | 10 years |
Stock-Based Compensation - Weighted Average Assumptions (Details) - Employee - $ / shares |
6 Months Ended | ||
---|---|---|---|
Nov. 01, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Estimated fair value (in USD per share) | $ 132.60 | $ 125.58 | |
Exercise price (in USD per share) | $ 436.63 | $ 426.25 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate, minimum (as a percent) | 4.78% | ||
Risk-free interest rate, maximum (as a percent) | 5.53% | ||
Expected life (years) | 6 years 7 months 13 days | ||
Expected volatility (as a percent) | 23.50% | ||
Dividend yield (as a percent) | 0.90% | ||
Estimated fair value (in USD per share) | $ 132.60 | ||
Exercise price (in USD per share) | $ 436.57 |
Segment Information - Narrative (Details) |
6 Months Ended |
---|---|
Feb. 29, 2024
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. 29, 2024 |
Feb. 28, 2023 |
Feb. 29, 2024 |
Feb. 28, 2023 |
Aug. 31, 2023 |
|
Revenues | $ 545,945 | $ 515,085 | $ 1,088,161 | $ 1,019,900 | |
Operating income | 181,942 | 169,250 | 370,982 | 341,145 | |
Capital expenditures | 21,917 | 17,456 | 38,383 | 35,416 | |
Assets | 3,990,866 | 3,990,866 | $ 3,962,922 | ||
Americas | |||||
Revenues | 352,618 | 331,121 | 700,985 | 654,488 | |
Operating income | 81,711 | 61,181 | 162,559 | 128,712 | |
Capital expenditures | 20,015 | 15,589 | 34,793 | 31,343 | |
Assets | 3,121,172 | 3,121,172 | 3,148,192 | ||
EMEA | |||||
Revenues | 139,176 | 132,508 | 278,737 | 263,246 | |
Operating income | 62,839 | 68,941 | 131,704 | 136,263 | |
Capital expenditures | 295 | 739 | 1,256 | 1,312 | |
Assets | 605,954 | 605,954 | 558,393 | ||
Asia Pacific | |||||
Revenues | 54,151 | 51,456 | 108,439 | 102,166 | |
Operating income | 37,392 | 39,128 | 76,719 | 76,170 | |
Capital expenditures | 1,607 | $ 1,128 | 2,334 | $ 2,761 | |
Assets | $ 263,740 | $ 263,740 | $ 256,337 |
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