But typically we do okay, right, during these periods. FactSet’s very sticky. We’re there to help our clients. We’re very trusted. We have a much more diverse portfolio than we had, you know, ten years ago, that’s for sure. And usually, you know, if people leave these firms, they end up somewhere else and if they like FactSet, they’ll — they’ll ask for it when they get that, which is always great. So it is hard to predict, but you know, we’ve handled this well in the past and we think we’re very well equipped to handle it if there’s even more uncertainty moving forward.
Alex Kramm: Fair enough. Thank you.
Operator: And thank you. And one moment for our next question. And our next question comes from George Tong from Goldman Sachs. Your line is now open.
George Tong: Hi, Thanks. Good morning. Your ASV guidance plans for slower growth from the banking category. Can you describe what you’re seeing with the sales cycles there and the broader pipeline? How much of the guidance reduction reflects what you’ve already seen versus conservatism around what you expect to see?
Linda Huber: Hey, George. I’ll take that. It’s a little bit of a combination of both. I mean, obviously this quarter has been a terrific one given our 9% plus growth rate, but we are seeing some higher erosion. And so that’s something we’re taking into effect. Banking is a pretty large piece of our Q4, so there’s probably a bit of conservatism there, but that’s because we don’t have that visibility at this — at this time. But — but knowing where we think hiring will go, that’s where that — that drives that two thirds piece. In terms of the rest of the — the book, we are seeing that more deals it’s taking longer to get some of the deals over the line. And quite frankly, what’s the benefit is the fact that we see quite a few that are still in the commercial negotiation stage, meaning, they’re in the right place, but it’s taking a little longer.
So that really speaks to the quality of the book, which is still solid. But given timing, it may take a little bit longer to — to monetize.
George Tong: Got it. That’s helpful context. And as a follow-up on a turn to margins, you had mentioned before that you expect margins to move lower heading through the year and understand the seasonality of margins. If you look at year-over-year comparisons with margins, which essentially would wash out seasonality, how do you expect margin — margins to progress year-over-year? And what are the key puts and takes as you think about margin expansion or contraction year €“over-year?
Linda Huber: George, the seasonality and the pattern is — is very similar to what it was last year in FY’22. And as we move forward, we would probably give you a little bit of outlook here on our four main cost buckets. People, we expect that cost will continue to increase as we go through the back half of this year. We have additional headcount, two thirds of it in offshore locations, but we do have additional headcount and we’re offsetting that by higher capitalization. We’ve done very well across the firm to increase the rate of capitalization, which is appropriate. And in the first half of the year, I would note our capitalization was $35 million. But the back half, you’re going to want to pick that up even a little bit more as the tech spend is heavier and thus the capitalization will be higher as well.
