FactSet Research Systems Inc. (FDS) Q3 2015 Earnings Report, Transcript and Summary

Welcome and thank you for standing by. At this time, all participants are in a listen-only mode until the question-and-answer section of today's conference call. Now I will hand the meeting over to your host, Ms. Rachel Stern, Senior Vice President, Strategic Resources and General Counsel. Ms. Stern, you may begin. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Thank you, operator. Good morning and thanks to all of you for participating today. Welcome to FactSet's third quarter 2015 earnings conference call. This conference call is being transcribed in real time by FactSet's CallStreet service and is being broadcast live via the Internet at FactSet.com. A replay of this call will also be available on our website. Our call will contain forward-looking statements reflecting management's expectations based on currently available information. Actual results may differ materially. More information about factors that could affect FactSet's business and financial results can be found in FactSet's filings with the SEC. Annual Subscription Value, or ASV, is a key metric for FactSet. Please recall that ASV is a snapshot view of client subscriptions and represents our forward-looking revenues for the next 12 months. Lastly, FactSet undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise. Joining me today are: Phil Hadley, Chairman and Chief Executive Officer; Philip Snow, President; and Maurizio Nicolelli, FactSet's Chief Financial Officer. I'd like to turn the discussion over now to Maurizio Nicolelli, Chief Financial Officer. At the end of his remarks, we will have time for questions. Please limit your remarks to only one question and one follow-up so that we will have enough time to address questions effectively. Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: Thank you, Rachel, and good morning, everyone. Here are the items that we will cover – that we will review for this call. First, I'll review the third quarter results. Second, I'll cover guidance for the upcoming fourth quarter. Lastly, we'll close by addressing your questions. Please note one housekeeping item. Included in our third quarter results was a tax benefit of $1.4 million, or $0.03 per share, from finalizing previous years' tax returns and other discrete income tax items. Amounts I disclose as adjusted exclude this tax benefit in order to present comparable figures with the prior year. A full reconciliation from GAAP to non-GAAP figures can be found in the table on page nine of our earnings release. Let's now proceed with our third quarter results. FactSet performed very well in the third quarter, as organic ASV grew $17 million compared to $12 million in the third quarter of fiscal 2014. With this performance, our organic ASV growth rate rose to 8.9%, up from 6.8% a year ago. In Q3, revenues, client count, user count, and adjusted EPS all grew to new highs. This growth translated into higher operating margins at 33.5% and a 14% increase in adjusted EPS to $1.42. Buy-side clients, who include off-platform data sales and the Market Metrics business, accounted for 82.8% of ASV, while the remaining 17.2% of ASV was generated by our sell-side clients, which include M&A advisory, capital market, and equity research businesses. In terms of geography, our U.S. operations totaled $688 million in ASV, while international operations accounted for $333 million, or 33% of the total. Let's now turn to free cash flow. We define free cash flow as cash generated from operations less capital spending. Over the last three months we generated $99 million in free cash flow, our highest quarterly total ever. Over the last 12 months, free cash flow was $273 million, up 8%. Free cash flow increased during the quarter due to higher levels of net income and an improvement in our working capital, primarily from higher levels of client receivable collection. Our DSOs were 33 days at the end of the third quarter, down from 34 days in the prior-year period. Our cash and investment balance was $183 million, up $36 million during the quarter. We continued our strong commitment to capital return in the third quarter while investing in the growth of our business. This quarter we spent $70 million on share repurchases. As of quarter end, $213 million remained available for future share repurchases. We also paid regular quarterly dividend of $16 million. When aggregating regular quarterly dividends paid and shares repurchased over the last 12 months, we have returned $317 million to stockholders. During the third quarter, we also increased our annual dividend by 13% to $1.76 per share, further increasing future returns to stockholders. Common shares outstanding were 41.5 million at the end of the quarter. Now let me walk you through our P&L. Revenues grew in the third quarter to $254.5 million. Organic revenues accelerated to 8.9%, our highest growth rate in the last three years. Operating income was $85.4 million, an increase of 12% over last year's adjusted operating income. Adjusted net income grew 13% to $60 million and excludes the previously mentioned income tax benefit of $1.4 million. Adjusted diluted EPS grew 13.6% to $1.42. In the current year third quarter, our U.S. revenues rose to $172.1 million. Excluding acquisitions, our U.S. revenue growth was 8.6%. Non-U.S. revenues rose to $82.4 million. Excluding the impact of foreign currency, international revenue growth rate was 10.5%. Revenues in the third quarter from our European and Asia-Pacific regions were $63.2 million and $19.3 million respectively. Excluding foreign currency effects, year-over-year growth rates were 9% in Europe and 15.6% in Asia-Pacific. Let's now review the growth drivers for this quarter. Our Portfolio Analytics suite of products continues to be a strong performer for us. In particular, our clients and prospects have realized the value of these applications and their capabilities in analyzing securities and portfolios based on a variety of asset classes. This quarter, we continue to see growth in our equity attribution and risk products, multi-asset class risk products, and fixed income portfolio analysis. Net user count for FactSet terminals increased by 1,600 users or 3% and totaled 59,000 at quarter end. Our user increase during the just completed quarter was our highest Q3 growth since the third quarter of 2011 (sic) [2010]. FactSet expanded in both its buy and sell side user bases. We also increased users within the corporate marketplace, primarily through partnerships with third parties. Client growth was strong this quarter, as we added 47 net new clients compared to 30 last year. New client growth in our buy-side business drove the majority of the increase. The client retention picture improved in Q3. In terms of number of clients, the retention rate increased to 94%, which is our highest ever retention rate. Consistent with prior quarters, our annual client retention rate was greater than 95% of ASV. Our wealth management products continue also to gain traction in our client base and thus are delivering positive returns for FactSet. Our clients operating in both large and small groups continue to find that our workstation effectively meets their needs in servicing their clients on a daily basis. Lastly, our sell-side business continued to expand due to growth in sales to middle market firms. Overall ASV from our sell-side clients grew at a rate of over 10%, reflecting a healthy M&A backdrop and the strength of our banking workstation and incremental value-added products. Now let's take a look at the expense side. Total operating expenses were $169.2 million, up $10 million from last year, while our operating margin increased to 33.5% from 31.5% in the prior-year period. Cost of services, expressed as a percentage of revenues, increased by 50 basis points compared to the year-ago period. The increase was driven by higher employee compensation, partly offset by lower third-party data fees and a prior-year stock-based compensation charge of $1.4 million from vesting performance-based stock options. Employee compensation expense grew, as we expanded head count by 9% year-over-year, primarily from new hires and acquired employees in connection with the Code Red acquisition. Lower data costs were the result of refinement and automation of our conference call transcription process. SG&A expenses, expressed as a percentage of revenues, decreased by 250 basis points in the third quarter compared to the year-ago period due to lower compensation expense from employees performing SG&A roles and decreased legal fees due to a $1.6 million legal charge in the prior year resulting from a claim settlement. Our head count at quarter end was 6,951, down 27 employees in the past three months but up 9% over last year. Q3 is traditionally not a heavy hiring quarter because many new consultants and engineers start in Q4 after college graduation. Consistent with previous years, we anticipate that our upcoming fourth quarter will be a strong quarter for new hires. We are also proud to point out that FactSet was recognized as one of Fortune's 100 Best Companies to Work For, marking our seventh appearance on the list in the last eight years. The third quarter effective tax rate was 28.5%, down from 29.8% a year ago due to $1.4 million in income tax benefits related to the finalization of previous years' tax returns and other discrete tax items. Excluding discrete income tax benefits from both periods, our current year annual effective tax rate was 30.1% compared to 30.5% in the year-ago period. Now let's turn to our guidance for the fourth quarter of fiscal 2015. We expect revenues will range between $259 million and $263 million. Operating margin should range between 33% and 34%. We expect our annual effective tax rate to range between 30% and 31%. Diluted EPS is expected to range between $1.46 and $1.48. The midpoint of the range suggests 12% year-over-year growth. In conclusion, we had another very healthy quarter. Our ASV growth rate continued to accelerate. We delivered at the upper end of all the metrics in our guidance, and adjusted EPS rose 14%. Adjusted EPS has expanded by double-digit percentages in every quarter over the last five years. This strong record has resulted in a high level of free cash flow and, in turn, increases our capital returned to shareholders. Our dividend increased this quarter by 13%. And including share repurchases, $317 million has been returned to shareholders over the last 12 months. More importantly, our business model has proved to be very strong and is supported by future investment and a seasoned management team. We like our position. We're excited about the prospects to continue to accelerate share gains over the long term. Thank you, and we are now ready for your questions.

Thank you, speakers. We will now begin the question-and-answer session. The first question is coming from Mr. Shlomo Rosenbaum from Stifel. Your line is open. Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: Hello, operator?

Yes, sir? Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: We're not hearing anything. Philip A. Hadley - Chairman, Chief Executive Officer & Director: We're not hearing anything.

All right, give me one second. All right, speakers, right now we don't have any questions in queue, but we're still waiting for them to press *1 to ask a question. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Operator, it seems like our speakers or our questions are having a hard time getting in the queue. Can you confirm that they're able to do so?

Give me one second. Let me just double check that for you, sir. Philip A. Hadley - Chairman, Chief Executive Officer & Director: They were in the queue and then the queue cleared, so something obviously happened.

Yes, sir, because I think – let me just double check that for you, okay? Thank you. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Shlomo and Peter, I know you both were close to the top of the queue. If you thought you were in the queue and had already done what you needed to do, you need to try it again because the operator seems to have cleared you out.

Thank you. Right now, speakers, we don't have any questions in queue. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Operator, there has to be technical difficulty on your side. There are at least 10 or 15 normal questions that would come on this call.

All right, give me one moment, sir. All right, speakers, let me just double check that for you, okay? Philip A. Hadley - Chairman, Chief Executive Officer & Director: Somebody just came in the queue.

Yes, sir, one moment. All right, we have a question now coming from Mr. Shlomo Rosenbaum, one moment. All right, give me one moment, sir. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc.: Hello? Philip A. Hadley - Chairman, Chief Executive Officer & Director: Yes, hi. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Hello. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Sorry about the technical difficulties. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc.: Hey, I think it's the 20th press of *1 that's the charm. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Okay, that's good to know. Obviously it worked for you. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc.: Obviously, thank you for taking my questions. I just want to probe a little bit about some of the growth drivers on the buy side. If you guys can, just delve a little bit more into maybe uptake on the wealth management product. At the Analyst Day there was some commentary that it's the fastest growing product suite within the company. Is that being sold yet in international locations?

Hi, Shlomo. It's Phil Snow. I can take that one. First of all, I would say on both the buy side and the sell side this quarter, the growth drivers were exceptionally broad-based. To answer your question specifically about wealth, yes, that is a good solid double-digit driver for us. We've been monetizing or selling to the wealth market internationally for quite some time, and this quarter a lot of the biggest closes actually were over in Europe for wealth specifically. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc.: And then on the sell side, sell side was particularly strong. What are you seeing? Is it just in particular to the M&A environment and more hiring, or were there any large displacements of a competitor in the quarter? Can you give a little more color on that?

Again, it was pretty broad-based. You saw that we had a great quarter in terms of net workstation additions. I think that's the strongest Q3 we've had in probably four years, and that was well distributed between the buy side and the sell side. So some of that growth was definitely coming from adding additional sell-side users. We had some healthy wins, in the hundreds, and a few losses as well, but it wasn't one big displacement that drove that number. And we're also doing very well against all of the competitors in our space. Shlomo H. Rosenbaum - Stifel, Nicolaus & Co., Inc.: Okay, great. I'm going to let some other guys get in the queue.

Great, thank you. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Operator, we're ready for the next question.

Give me one second, speakers. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Peter, are you there by chance? Peter P. Appert - Piper Jaffray & Co (Broker): I'm here. Can you hear me? Philip A. Hadley - Chairman, Chief Executive Officer & Director: Excellent, I don't think we need our operator.

Yes, go for it. Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: Go for it. Peter P. Appert - Piper Jaffray & Co (Broker): Okay, excellent. So you guys have been very clear that margin upside is not part of the strategic focus, but the margins have been very impressive here, up nicely in the last couple of quarters, anything we should read into that? And maybe this acceleration in revenue growth we've seen in the last couple quarters has given you a little more leverage than you might have otherwise expected. Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: Hi, Peter. It's Maurizio. You are correct. We've had some nice margin expansion from Q3 of last year. If you remember, last year our adjusted op margin was 32.8%, and I think this quarter it's 33.5%. We've gone up 70 basis points. Also, our margin was diluted by 40 basis points for the Code Red acquisition. We continue to reinvest in the business. Our head count has grown 9% on a year-over-year basis. And so essentially, a big part of the ASV growth is also going into reinvestment, but we have increased our margin over 100 basis points on a year-over-year basis. And we're comfortable with the guidance going forward. Peter P. Appert - Piper Jaffray & Co (Broker): Okay. So we shouldn't anticipate a new trend here in terms of moving the margin up to perhaps a higher level in the context of faster revenue growth? Philip A. Hadley - Chairman, Chief Executive Officer & Director: Peter, I'll chime in. I don't think Phil and the management team – the character of the business is definitely still to reinvest. As you know, quarter to quarter things bounce up and down. FX is helping us. But as Maurizio said, we're definitely continuing to reinvest heavily in our head count. Peter P. Appert - Piper Jaffray & Co (Broker): Got it, perfect. Good, and I'm going to violate the one question only law because who knows if you get another question or not. I'm just wondering. This is an extension to what Shlomo was asking. The growth in users and in ASV has also been very impressive here over the last six quarters. And I'm just wondering if this gives you maybe a little more confidence in terms of the ability to accelerate the growth further going forward, or as you think about it, the guidance might suggest that the growth is a steady-state number going forward. I hope that was clear enough.

Yes, it's a great question. We still view massive opportunity in the market and all the market segments that we're going after. The new management team is in place. We've gone through I think a very well orchestrated transition over the last year. So I feel like we're poised to continue to grow. And the clients definitely feel healthy. I think we're seeing that on the sell side where the hiring trends feel good to us. Peter P. Appert - Piper Jaffray & Co (Broker): Okay, great. Thank you. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Our next question is from Manav Patnaik from Barclays.

Hey. Thanks, guys. Can you hear me? Philip A. Hadley - Chairman, Chief Executive Officer & Director: Yes, we're good.

All right, perfect. Just to follow up on the margin question, how much has FX been contributing to the upside? I'm just trying to sense if your question is on reinvesting, how much is FX benefiting you. Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: FX has been a benefit to us over the last 12 months. Again, that benefit has translated in two positive impacts for the business. One is head count has grown over 9% as we have reinvested a chunk of that business into investing it back into the business. And the other piece of that is our margin expansion of 110 basis points over the last 12 months.

Okay. But it's not easy enough to just quantify – so steady state you would have seen flat margins without the FX benefit? Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: I think our margin guidance would indicate that we're trending very similar to the third quarter.

Okay, fine. And then I guess a couple of quarters ago there was a lot of chatter in the industry around the new chat initiative, and everyone was trying to come up with the open source platform. Do you guys have any update or color on where that stands today from your point of view?

On the chat initiative?

Yes. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Manav, it's Phil Hadley. I think we're certainly very supportive of it. For us it's an opportunity for the marketplace to create another platform for chat to occur. So I think all the industry participants both buy side, sell side, and participants like us will certainly be supportive of the process, and I think it's got a great chance.

Okay, all right, fair enough. I'll get back in the queue. Thanks, guys. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Alex, can you hear us?

Yes. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: So our next question is from Tim McHugh. Alex, we'll get back to you in two seconds. Can you press *1 again and get back in the queue and we'll get you? Tim, do you have whatever you want (27:13)? Timothy J. McHugh - William Blair & Co. LLC: Yes, okay. All right, I just wanted to follow up on the sell side. I know you described – I guess it was pretty broad, but there has been a pretty big acceleration just versus a year or two ago. So did the market get that much better in your view, or are you doing anything differently than I guess a year or two ago that you would attribute the improved growth on that side of the business?

I think one thing that I'll point to is just the strength of our product. I think we've got some good product differentiation, particularly with our office (27:47) suite and some of the unique content that we offer. And we have a great sales team as well. Timothy J. McHugh - William Blair & Co. LLC: I mention though, if I asked you a year ago, would you have said that same thing?

That's a good question. We've acquired a little bit more content and continued to build it out. And the hiring trends on the sell side are definitely helping. Timothy J. McHugh - William Blair & Co. LLC: Okay. And I'll leave it at that. Thanks.

Yeah. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Alex Kramm is our next questioner, from UBS.

Good morning. Can you hear me now?

Yes, we can hear you. Philip A. Hadley - Chairman, Chief Executive Officer & Director: Hi, Alex. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Yes, sorry for the...

Fantastic. Anyways, I missed the last question a little bit, so hopefully I'm not asking the same thing. So coming back to the sales efforts, obviously there's been some management changes and obviously some new hiring on the sales front. And I guess it sounded like the sales force might be a little bit more held accountable in the future with some of the initiatives that you talked about at the Analyst Day. So could you just talk about what changes have been implemented, if you've seen any difference in motivation or efforts? So any color that you can give there would be great.

Yeah, I think we've always had a very motivated sales team at FactSet, and this is just sort of a natural opportunity for us to reorganize. So Scott Miller has done a great job. He's got his entire team in place at this point. I think we mentioned this on our previous call, but we now have dedicated heads for both Asia and Europe, whereas previously that was a little bit more mixed together, so I think that's very positive. We've done a lot to separate out the global majors from the rest of the sales force, so really focusing on the bigger banks and the buy-side components of those. That's another change. And I think thirdly, FactSet Consulting is really one of our really great competitive advantages in the marketplace, just how we service our clients. So we have someone leading that effort now globally rather than it being regionally and just bringing us to that next level with our consulting group. So to summarize, there's a lot of really great energy in the sales force, and we're really excited about what we can get out of the group.

All right, that's helpful. Thank you. And then secondly, I think this question comes up once in a while too. But when I calculate ASV per user, that number year-over-year declines I think 2.5%. I think it's one of the largest declines we've seen in a while or ever. I know there's a lot of mix and I know you had a strong user growth, but anything you would call out there in particular, or is it just a mix issue?

We don't track it that heavily internally at that level. So it really is a function of which clients, what types of users within those clients, and what the mix is in terms of new business versus same-store sales, so all of those things play into that number. Generally speaking, when we bring on either a new client or a new user at certain types of firms, they come in at a lower price point, and our model is then to upsell them moving forward...

Right. And I assume a lot of sell-side growth also probably depresses that a little bit, right, because that's usually a little bit lower, is that fair?

Sounds right.

Excellent. Thank you.

You're welcome. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Our next question is from Joe Foresi at Janney. Joe, are you there?

Yes, well, actually this is Robert Simmons in for Joe. So you mentioned before the healthy M&A background. Do you see that picking up, just keeping it on this focus (31:41) we had before? Or any kind of color you can give there would be helpful.

I don't think I have any great insight into that other than what you would have. I think it just generally feels healthy for us, that it's probably at all-time highs and we're able to capitalize on that.

Okay. What are you seeing in terms of your own M&A?

We continue to evaluate a lot of different opportunities that we come across. There are some natural adjacencies for us, which I'm probably not going to get into in any detail on this call. But we're as active or more active than we've been in the past.

Okay, great. I'll hop off. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Our next question is from David Chu at Merrill Lynch. David?

Hi. Can you hear me?

Yes, hi.

Okay. So based on current FX rates, should FX benefits start to moderate in the fourth quarter? Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: I think our FX benefit is reflected in our guidance going forward. You can see it's fairly stable as of today. To be quite honest, we only look out one quarter in terms of our guidance. So I think FX would be fairly stable over the next quarter based on our guidance.

Okay, got it. And of the roughly 1,600 new subscribers from the third quarter, how much was buy side versus sell side?

We typically haven't broken that out, but it was a very healthy mix between both.

Okay, thank you very much. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Our next question is from Bill Warmington at Wells Fargo. Bill?

Good morning, everyone. So, Phil, back at the Investor Day in March, you talked about your goal of accelerating organic ASV growth, and this quarter you started to see it from 8.5% up to 8.9%. You talked about taking it up to the double-digit level. And I was going to ask if you have any thoughts on the timeframe for achieving the double-digit organic revenue growth.

I'd like it to happen as soon as possible, obviously, but I don't think I'm going to tell you when that's going to be. But I think we've got a great opportunity to get there sooner rather than later.

Okay, so I guess my point in the question is it's been flat for a couple of quarters. at a very strong level, but it has been flat. You're starting to see it pick up.

It has been picking up.

Pardon?

It's been picking up pretty consistently.

Yes, I'm just saying the last couple quarters.

Yes, yes.

And so this quarter showed another step up. And I guess the question is, does that continue over the next couple of quarters as well?

That's a great question and that's part of what you have to figure out.

Then the comment on the FX, you had mentioned that there was a margin benefit. Is there a revenue benefit from the FX as well, either on the reported side or the ASV side? Maurizio Nicolelli - Chief Financial Officer & Senior Vice President: 98% of our revenues are billed in dollars.

Correct. Okay, all right, thank you very much.

Thank you. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Our next question is from Toni Kaplan at Morgan Stanley. Toni M. Kaplan - Morgan Stanley & Co. LLC: Hi, thanks for taking my questions. I wanted to ask about the pricing model. I think the last time you spoke about it, it was about $24,000 for the first terminal and $12,000 for every additional. Is that still how we should be thinking about it, or is there a way to flesh out some of those different client types or different structures that we should be thinking about, maybe wealth management, et cetera?

Yes, that price point that you mentioned is – that's applicable for a certain segment of the market when we're bringing on new clients. Toni M. Kaplan - Morgan Stanley & Co. LLC: Yes.

But yes, we have different pricing models for different types of users and different types of clients. Wealth is one where I think we've done a really good job of packaging different options for three different levels of the market. But I don't think we're going to talk about what exactly those price points are for all the different segments of the market on this call. But we do have different models, and it's something that we're continually evaluating in terms of what we should be doing, in terms of pricing and packaging. Toni M. Kaplan - Morgan Stanley & Co. LLC: Okay, great. And then when you look at your overall product portfolio, are there any specific areas that you'd like to ramp up more, either organically or through M&A?

All of them. We have three major areas that we're focused on now, not that we haven't been before, but in terms of how we've reorganized things. So we have a workstation solutions team, which is really focused on front office professionals. We have an analytics team which is really what you should think of in terms of our PA fixed income quant and risk products. And then we have our contents and technology solutions team, who are really focused on monetizing our content outside of our workstations in whatever way our clients want to consume it, whether it's a feed, on demand, through some sort of partnership. So we're heavily focused on all three areas, and we think we can get all of them into double digits. Toni M. Kaplan - Morgan Stanley & Co. LLC: Thank you.

Okay. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Our next question is from Dan Dolev at Jefferies. Dan?

Hi, Rachel. Thanks for taking my question. Of the 8.9% organic ASV growth, can you quantify specifically – and I'm sorry if someone already asked that, I didn't catch it. What percent or part of it was due to market share gains versus market growth? And then who are you gaining share from primarily? Thank you.

I think we're continually taking share from all of the major competitors, Dan, that you know of in the marketplace. So each quarter it differs a little bit in terms of who those names are and what types of clients, but we feel like we're doing very well on a competitive basis. And just to remind everyone, in terms of the overall market, we're still probably at 5% of that, so we view opportunity against all of our competitors.

So is it mostly the bigger guys, Thomson Reuters and Bloomberg?

Yes, typically it's Reuters, Bloomberg. It's S&P Cap IQ. Those are the three major competitors that we have, other firms that we compete with in more regional markets.

Got it. And then can you quantify the percent or proportion of growth, of ASV growth that's from share gains versus market growth approximately?

I don't think we have that number at our fingertips now. We don't track that very closely.

Got it. Okay, thanks again. I appreciate it.

Yes. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Our next question is from Andre Benjamin at Goldman Sachs. Andre? Andre Benjamin - Goldman Sachs & Co.: Thanks for taking my question. I had a question. Could you maybe provide a little bit of color on how the fixed income product performed this quarter? And if you are seeing acceleration there, what's driving it?

Hey, Andre. This is Phil Snow. Yes, that fixed income product just continues to do exceptionally well. It's very, very strong in a couple of different areas. One is just selling to analysts that do a lot of credit analysis, and the other is on the Portfolio Analytics side of the equation. So it's doing great. We're continuing to reinvest in it, and we don't anticipate that slowing down. Andre Benjamin - Goldman Sachs & Co.: That was all I had.

Thank you. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: Our next question is from Andrew Hummel at Oppenheimer. Andrew? Andy T. Hummel - Oppenheimer & Co., Inc. (Broker): Hey, guys. Thanks for taking my question, just a follow-up to the fixed income product. I know you guys talked about at the Analyst Day possibly rolling out more of I guess fixed income trading platform. I'm just curious what inning you guys are in on that, whether it be with the development or if you've rolled out in the market yet, and just any way to think about the demand for that product from current clients in relation to the analytics platform. Thanks.

I would say if the question was fixed income trading, I think we're in the very, very early innings of thinking about that. We're more focused on the portfolio attribution and risk side of the equation. Andy T. Hummel - Oppenheimer & Co., Inc. (Broker): All right, thanks. Rachel R. Stern - Secretary, General Counsel & Senior Vice President-Strategic Resources: At this time, we have no more questions. Thank you all for dialing into our call. We will talk to you again in September. Thanks.

And that concludes today's conference. Thank you all for joining. You may now all disconnect.