Linda Huber: Thank you, Heather. It’s Linda. We had talked about how our expenses tend to ramp up as we move through the calendar year. So I think it’s fair to say that margins we’ve been fortunate enough to put up in Q1 and Q2 will decrease a bit as we move through the back half of the year. So we did adjusted operating margin of 37.6% in Q1 and 38.3% in Q2. So I think it would be fair to expect arithmetically something closer to 35% for the back half of the year to get us to the midpoint of our guidance of 36.5%. And again, it is our intention to hit the midpoint of that guidance on adjusted operating margin despite a slightly softer top line. So you should expect a little bit of the technology cost to continue to move up as we go through the year.
And of course, we’ve taken some actions to ensure that we have the appropriate headcount and appropriate location for our employees going forward. So we think we’re in a good place, and we are prepared to deal with the cost base so that it works for the lower end of the revenue range. So we’ve got all that in the mix and so a little bit lower in the back half of the year. Thanks.
Operator: Thank you. One moment for our next question. Our next question comes from Alex Kramm with UBS. Your line is open.
Alex Kramm: Yes, hello everyone. Phil, would love to come back to some of the commentary you made for the third quarter and fourth quarter outlook. It sounds like third quarter, you said fairly soft relative to last year. So maybe you can just flush out if that’s, again, lower pricing expectations or just lower net sales. And then on the fourth quarter, you sound pretty optimistic. So maybe you can just back that up a little bit, because I think you made a comment that hiring was actually an area that’s still pretty soft from what you can see, and I think the fourth quarter is very dependent on hiring. So it maybe flushes out, maybe you just have a great pipeline of non-hiring-related 4Q expectations. So a little bit more color would be great.
Philip Snow: Sure. Yes, I’ll start, and I’m sure Helen will have some additional comments. Thanks, Alex. Yes, I mean, Q3 is typically a smaller quarter for us anyway. What I can sort of point to is that we have a large number of seven-figure deals in the pipeline and probably a higher number than we had this time last year. So there’s certainly an appetite out there for large enterprise solutions with all types of different firm types. So I mean, in your reports, you sort of point to the hiring on the buy side and the sell side, and it’s certainly come down in both areas. The sell side was weak last Q4. I’m not sure that we’re expecting anything different than that this year. But if rates do get cut and the banks feel optimistic, we could see a tailwind from that.
But I’m not sure it’s any more of a headwind, frankly, than we saw last year. On the buy side, I think we’re going to continue to see increased pressure on headcount as we move forward, particularly with generative AI. But that’s all baked into our thesis in terms of our enterprise solutions and what we’re doing to product. And despite that, we’ve got 200,000 seats approximately today. There might be 9 times or 10 times that many seats out there in the industry. So we’re — we’ve doubled the number of seats on FactSet in the last five years or so. And we still feel even with increased pressure on headcount, there’s a good opportunity for us to tie the front office to the middle office to the back office. And particularly on the buy side, we have the portfolio holdings of our clients.
That’s one of our key differentiators. And the firms that are going to win are the ones, I think, that can help the large firms continue to consolidate with a very good TCO conversation, which we’re leaning way more into than we have in the past. Helen?
Helen Shan: Yes. No, that’s exactly right. Thanks for your question, Alex. As I mentioned, we do have a healthy H2 pipeline. Phil focused on the seven-figure deals. I focus on six and seven-figure deals. So that’s up year-over-year, I’d say, almost sort of 5% in terms of total numbers. So I think that gives us some greater visibility and confidence. And because of these total — these TCO conversations, a lot of the pipeline is focused on competitive displacements, which has been strong for us. So the ability for us to convert those will be important. The strength of the markets, both capital markets and flow of deals are important as you know, especially as it relates to banking and wealth. For right now, we’re just — we’re not assuming that banking is all of a sudden going to pop up with sort of flat to last year, although we’ll know more, as you know, in the Q3 and Q4.
Operator: Thank you. One moment for our next question. Our next question comes from Andrew Nicholas of William Blair. Your line is open.
Andrew Nicholas: Hi. Good morning. I wanted to ask about budgets and maybe cyclical sensitivity from like a business line or maybe even product-type perspective. It sounds like you’ve seen some stabilization. There’s some pockets of recovery. But I’m just curious, are clients maybe more apt to push off platform or workstation purchases or decisions than they are on the data side or on the middle office side? Just curious if there’s a difference in the way that people are prioritizing their budgets and their spend at that level or from that perspective?
