Phil Snow: Yeah, happy to do that. Thanks for the prompt. And yes, so in using GenAI [columns there] (ph). Yeah. So, we’ve had 25 to 30 under knees tables — knees-under-table meetings with our clients. We’ve seen a lot of enthusiasm from all firm types. And a lot of that has to do with our capabilities, the data, the technology, and our relationships with clients. But there’s a desire out there to codevelop some things. So, we’re working very closely with some large banks. There’s opportunities there for bank automation. I think everyone’s always felt that, although the processes that are out there haven’t evolved much over the years. But I think this is the time they will. On the buy side, I mentioned in my earlier comments, there’s an opportunity to radically improve the life of a portfolio manager or a research analyst that’s having to sift through so much information.
And on, the wealth management side, we talked earlier about other workflows, right? So, can we get into proposal generation? Can we get into augmented prospecting for our clients? These are all great opportunities. So, we’re very encouraged and we’re moving very quickly.
Operator: Thank you. Our next question comes from the line of George Tong with Goldman Sachs. Your line is now open.
George Tong: Hi, thanks. Good morning. At the midpoint of your guidance for ASV plus professional services organic growth of 7% for next year, that guide is essentially unchanged from growth that you saw this year for fiscal ’23. And you mentioned that the first half of the fiscal year, we’ll see some pressure, followed by improvement in the second half of the year. Does that suggest that you expect trends to get worse compared to this quarter before they get better such that you land at that 7% growth at the midpoint next year? And can you talk about which areas of the business you’re assuming undergoes the most inflection over the course of next year?
Helen Shan: Hi, George, it’s Helen. I’ll take that. So, I won’t — I would not necessarily say it gets worse. I think what I mentioned in particular on banking is the comparison, H1 over H1. So last year, a lot of the hiring that was very, very strong, continued on. And so, if you may — you probably recall how strong we were in our first half of last year. So, in comparison, the impact from the changes in workforce reduction will impact this current fiscal ’24 H1. So, when we talk about a stronger H2, we are assuming that there is not an inflection, I will say, necessarily of a pick-up in banking back to ’22 levels, but overall hiring and budgets being more open, and that’s why we’re talking about the fact that we had this fiscal year-end of August, their calendar year clients are generally starting to then make — open up decisions in what will be our H2, and that’s what we were referring to.
Operator: Thank you. Our next question comes from the line of Andrew Nicholas with William Blair. Your line is now open.
Andrew Nicholas: Hi, good morning. Thanks for taking my question. I wanted to circle back to the GenAI topic, but focus maybe more on the cost side. It does sound like, Linda, that there is an increase in the technology budget to account for some of these investments. Are there any cost savings coming from GenAI maybe operationally within the SG&A line, or just some of the organizational infrastructure you have that you expect to come from these investments? And is that something that that would be embedded in ’24, or is that a ’25, ’26 type benefit if it’s there? Thank you.
Phil Snow: Maybe I’ll start and then I’m sure Linda will add some additional comments. So, we’ve been looking at how we work ourselves and thinking about how can we be more efficient ourselves internally. We have a lot of engineers at FactSet, a lot of people that code that are even client-facing. So, I think it’s pretty common knowledge that there should be some efficiency here, right? So, we’re piloting a lot of copilot solutions with our technologies to kind of understand what that means at different levels of the organization. We have a large client service and support group here at FactSet. We’ve released a tool to about 400 people that are the front-line support for our clients that assist them in generating answers for clients.
So, that’s in the beginning stages there. And then, of course, we collect tons of data. So, about half of FactSet’s employees are in the Content or Data Solutions part of our business. So, we see a lot of opportunities there. So, we do see significant opportunity. The question is the timing and how much of that we’d like to reinvest, right, in terms of some of the new products that we’re thinking about to drive growth.
Linda Huber: Yeah. Andrew, it’s Linda. It’s a great point and a great question. I think your view on timing is largely correct. So, we’re looking for internal efficiencies maybe to start showing up more in FY ’25. Our initial focus will be client-facing in keeping with the way we think about everything here at FactSet. So, what we’ll do is look to move some of those tools we’re building for our clients and look to apply those to ourselves. But we do think that’s probably going to show up in a bigger way in FY ’25. You’ve heard the guidance for FY ’24. So, hope that helps.
Operator: Thank you. Our next question comes from the line of Ashish Sabadra with RBC Capital Markets. Your line is now open.
Ashish Sabadra: Thanks for taking my question. Just wanted to go back to the ASV guidance and just better understand the headwinds and tailwinds. As I understand, when we think about some of the headwinds from like the investment banking and [CAS] (ph), as well as increased erosion and pricing normalization, we were thinking that could be in the range of like a 2 points to 3 points of headwind. And obviously, you’ve talked a lot about the new win momentum, the share gains. Just wondering, is that enough to offset the headwinds as we get into fiscal year ’24? Thanks.
Helen Shan: Hi, Ashish, it’s Helen. Thank you for that question. I think from our perspective, I don’t want to say we’ve hit a bottom. That’s too strong of a word. But when I think about this year and last year, I would expect that two things to happen. One is that the erosion reduction will actually be more leveled off, and I think that’s an important thing to sort of keep in mind. Banking is key, but we actually grew the number of seats in banking overall. Please keep in mind that part of that isn’t just around the clients that we have, but the new clients that we win, and we have a couple of very good opportunities. So, we look at that as part of our — when we talk to firm type. The second is pricing, which, in the past, I think we’ve talked about a third, a third, a third.
I think from a pricing perspective, it actually added more this year from a percent basis than in the past. We see it continuing to add in 2024, although closer back down to maybe a quarter or less than a third. And I think that’s probably more of the — a bit of a headwind that I would look to than necessarily just thinking about seats. So, that’s how I would take a look at some of what’s built into our guidance. We have some large deals in there. We’ll see if those come through. They got pushed from ’23 to ’24. And then, there will be, I’m sure, continued focus on costs by our clients.
