Ladies and gentlemen, thank you for standing by, and welcome to the FactSet Q1 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session [Operator Instructions]. I would now like to introduce your host for today’s conference call, Ms. Rima Hyder. You may begin.

Thank you, Kevin, and good morning, everyone. Welcome to FactSet's first quarter 2021 earnings call. We continue to be in various remote locations today. We may have some audio quality issues, and we appreciate your patience, should we experience a disruption. Before we begin, I would like to point out that the slides we will reference during this presentation can be accessed via the webcast on the Investor Relations section of our website at factset.com. The slides will be posted on our website at the conclusion of this call. A replay of today's call will be available via phone and on our website. After our prepared remarks, we will open the call to questions from investors. To be fair to everyone, please limit yourself to one question, plus one follow-up. Before we discuss our results, I encourage all listeners to review the legal notice on Slide 2, which explains the risks of forward-looking statements and the use of non-GAAP financial measures. Additionally, please refer to our Forms 10-K and 10-Q for a discussion of risk factors that could cause actual results to differ materially from these forward-looking statements. Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliation to the most directly comparable GAAP measures are in the appendix to the presentation and in our earnings release issued earlier this morning. Joining me today are Phil Snow, Chief Executive Officer; and Helen Shan, our Chief Financial Officer. I would now like to turn the discussion over to Phil Snow.

Thanks, Rima, and good morning everyone. I'm pleased to report that FactSet has started its fiscal year on track to meet its first-half goals. We've learned a lot over calendar year 2020, how resilient our business is, how well we can work remotely and the strength of our client relationships. The last 12 months have also served as a reaffirmation of our investment strategy in content and technology. FactSet's focus on supporting client workflows across the entire portfolio lifecycle is increasingly serving as a differentiator for us in the market and we enter the new calendar year with increased visibility and measured confidence in our position. Our focus remains on maintaining our already high client retention, adding new clients, expanding wallet share with large strategic clients and continued pricing discipline as we seek to capture more market share. Strong execution will be key to performance this fiscal year and we are optimistic in our ability to close our pipeline. Our second quarter pipeline is higher now than it was at this point a year ago and we have proven that we can execute well. Ultimately, we provide clients with critical data that is only increasing in importance. The demand for more and more differentiated content is at an all-time high, especially on the buy side and FactSet's depth and scale in this area places us in a solid position. We believe we offer the strongest data concordance in the industry and this strength coupled with FactSet's comprehensive suite of open and flexible technology solutions are driving more engaged and actionable C-suite level conversations. Moreover, our ability to link diverse content and convert unstructured data into structured meaningful financial insights is a key differentiator for us in the industry. We are the provider of choice for many of our clients looking…

Thank you, Phil, and hello, everyone. I'm happy to be speaking with you today. And I hope you and your loved ones continue to be safe and healthy as we enter the holiday season and end of the year. In our first quarter, we accelerated revenue growth, reflecting the momentum from our fourth quarter’s strong ASP performance and expanded our operating margin. We continue to progress in our investments in content and technology and, in fact, are using a portion of the cost savings associated with the ongoing pandemic to further fund initiatives in sales and product. We are also pleased to welcome the Truvalue Labs team to FactSet. Given that we closed the transaction in early November, the financial impact on our results is immaterial for this quarter. The acquisition adds approximately $5 million of ASV, which is included in our reported ASV plus professional services. We will exclude this amount for organic-related metrics for fiscal year 2021. As Phil stated earlier, we grew organic ASV plus professional services at 5%, as IT [ph] acceleration from the previous quarter and reflecting the seasonally slower start to our fiscal year. GAAP revenue increased by 6% to $388 million, while organic revenue which excludes any impact from foreign exchange and acquisitions increased 5% to $387 million. Growth was driven primarily by analytics and CTS. For our geographic segments, America's revenue grew 6%, EMEA came in at 5% and Asia-Pacific revenue grew 10%. The regions primarily benefited from increases in analytic and CTS. GAAP operating expenses grew 5% in the first quarter to $267 million, impacted by higher cost of sales. Compared to the previous year, our GAAP operating margin expanded by 30 basis points to 31% and our adjusted operating margin increased by 40 basis points to 34%. These improvements are…

[Operator Instructions]. Our first question comes from Andrew Nicholas with William Blair.

Hi, good morning. Thanks for taking my questions. Really strong margin performance in the quarter, nicely above the full-year guidance range. Given you maintained the full-year guide, I was just hoping you could speak to the mix of factors driving implied step up in expenses through the second-half of the year or through the remainder of this year. Mostly just wondering how much of that implied increase is investment spend versus maybe a return to a portion of -- a return of a portion of those T&E costs or the facility costs, you called out. Just trying to get a sense for that and maybe the cadence of spend throughout the rest of this year?

Sure. Thanks for your question. So yes, we are pleased with how we're performing. When we think about the benefit in this quarter, it comes in part from the higher revenue growth, given the strong Q4, and that's offset by both growth and expand in both comp -- compensation and technology. The salary growth with – comes with the new hires. We did quite a lot in Q4 and that's coming through. And that's why when they become more of a run rate, which is more in Q1, we’re going to see that come through for the rest of the year as well as our merit increases that come through. So that's why there's a bit of that cadence that we'll see come through post Q1. And we've also been doing additional spend in sales and product hiring and development, and that's going to see that come through for the back-half of the year also. I think that when we talk about the part that's going to be more permanent, that is really when we’re back to an ongoing normal, whatever that’s defined as an environment. But we’re also going to start to lap, as we get into -- partly into Q2, but more into Q3, Q4. So that’s also why, from a margin perspective, we’ll see that play out through the rest of the year, and so that margins will reflect that as well.

Understood, thank you. And then, obviously, one of your competitors announced a major merger late last month. I was hoping you could speak to one, how you anticipate the competitive dynamics in this space to evolve as a consequence of that deal? And then second, what your outlook is in terms of consolidation in this sector broadly, and whether you anticipate continued activity of this type going forward? Thank you.

Hey, Andrew, it’s Phil Snow. I’ll take that one. So, what we’re focused on, is our strategy, which we feel really good about. So if you think about FactSet and how we differentiate ourselves in the marketplace, so much of that has driven by the workflows that we build out around the client portfolios, particularly on the buy side and increasingly with wealth. So, our strategy is covering the portfolio lifecycle from research through to client reporting, and what we can do there in combination with the investment we're making in digital transformation for our clients. So, that's the piece of the market that we see as being truly differentiated for FactSet, along with the concordance that we offer between those portfolios and all of the data sets that we have on our platform. And we think there's some real advantages to that strategy and the agility that we have, when we talk to our clients. So we -- the consolidation of the industry has been happening for a long time, but we don't necessarily see this particular deal as something that would necessarily affect us in a negative way.

Great. Thank you.

Sure.

Our next question comes from Manav Patnaik with Barclays.

Thank you. Good morning, guys. I just had a question on the Truvalue Labs acquisition. I think the cross-sell opportunities seem pretty evident. I was just curious on what this means to the ESG strategy, because I think, in the past you were more ESG-agnostic, I guess, just pass-through other data through your system. Does this change that? Like how should we envision what you guys are working towards in terms of the ESG thing?

Hi, Manav, it's Phil. I would think of this the way that, we've handled some other new content sets that we've gotten into. So we still want to be that ecosystem where the concordance that we offer and the software that we provide is a reason clients want to come to FactSet. So we have, I think, upwards of 20 ESG providers within the open FactSet marketplace. And I believe we've integrated about nine of those within our workstation and other workflows just based on client demand. So I don't anticipate that changing. I think what we can do, if we own n asset, which is differentiated, like Truvalue is we can further integrate that through the different workflows for our clients. So we see exciting opportunities for Truvalue, just in terms of continuing to sell it, as a discrete product, which could be a feed or an API just for the signals, but then we can get it really embedded in our RMS, Research Management Solutions. We can attach it to the portfolios. So I think it's going to become ubiquitous now, ESG across portfolio management. And the strength that we have with our portfolio analytics products, is that you can really configure the groupings, the columns, the things that you want to know about your portfolio, and getting this data in there, I think, will be exciting for our clients and something that frankly, they're all going to be demanding and needing to do in the future.

Got it. And maybe just -- if you could give us an update on Open:FactSet, I guess, it's been a while just maybe some metrics, how things are going there?

Yes, it's been an evolution. So we continue to add lots of alternative data providers to Open:FactSet and you can easily go and look at those now through the FactSet website that’s – we've got the whole library of data that we have up there. The strategy is evolving as we go, and as we learn more in terms of what clients are wanting. The way I would describe Open:FactSet now is not just necessarily that you're accessing alternative data providers in a modern research environments, but it's really the opening up of FactSet's technology stacks. So we continue to deploy more and more APIs, so that those that want to come into the FactSet ecosystem and create value, either with content or technology, are able to do that. So we do see some momentum both in the alternative data providers and how much we're able to monetize that, as well as the use of APIs. The use of APIs has actually been driven mostly through the analytics group so far. So all of the power of PA that clients use to for the workstation, they're now able to take those APIs and plug them into their own technology stacks and workflows, if that's something that they wanted to do. So we’re – it's a big piece of our strategy. And I think, again, it's one that differentiates us when you think about FactSet and how we go to market and how we work with our clients.

Got it. Thank you, guys.

Our next question comes from Toni Kaplan with Morgan Stanley.

Thank you. Phil, just touching on that digital transformation strategy point, I know you just mentioned the APIs, but maybe you could talk about where you are on the move to cloud, how much is sort of left to go? And what are the -- just in general, biggest opportunities encompassed within this digital transformation theme? Because I know you've talked about your clients going on this process as well. So is there a way to sort of quantify it or is this more about taking share versus others as you sort of personalize things? Just anything from a product or strategy or positioning standpoint would be helpful? Thank you.

Sure. Yeah, so one metric that could be useful is how far we've come in terms of moving to the public cloud. We said that a year or so ago that our plan was to be 80% in the public cloud by the end of the original three year plan, which would be seven quarters from now. And we're now 35% of the way there. So that's something that we're measuring very closely. Of course, there are lots of other ways to measure that, but I think that's a good one to keep track of. I'm talking these days, Toni, to more CTOs and CIOs than I have around their entire workflow, and what it is they're doing from a technology standpoint. These are our largest clients. So one thing that our strategic client group and our other regional teams are doing with our larger clients is sitting down with them, really understanding the opportunities that are there, and some of the pressures frankly, that the clients are facing regarding their own digital transformation. And we're having very open conversations with our clients about their entire workflow, their technology stack. We help blueprint that for them and then we really overlay access capabilities across their entire workflow to help them understand how we can help them consolidate their -- the number of providers that they deal with in the marketplace. So the very largest clients, over the years have dealt with hundreds of providers, whether they’re technology or just content providers, and then being forced, I think to choose who are the one or two firms that we really want to tie ourselves to for the future as a platform and then how do we get that list of hundreds of providers, maybe cut it in half even. So that's something that we're spending a lot of time with clients on. And this is one of the things that I'm most excited about, particularly as we look at the second half of the year in terms of the pipeline, and really trying to get deals that are in the millions of dollars into that pipeline around this theme for our clients.

Maybe Toni, I can just add a couple things that we look at internally in terms of measuring is a little behind the scenes, but we're making good progress in terms of content automation, and the speed. So we're measuring the speed of, when we're integrating and the collection around the speed and processing. And those are important pieces because that is part of our digital transformation. That is again, behind the scenes that we measure and track as well.

That's great. And it sounds from the comments in both the press release and earlier in the call that you sound like you have more conviction in what's going on in the market and the pipeline being robust. And the investment strategy is sort of in the line of what your clients need. So just wanted to help understand -- bridge that versus your guidance is still sort of calling for further deceleration in ASV by the end of the year. I know last quarter, you talked about the large deals. Is that mainly the real bridge between that because it sounds like you have some momentum right now that you're expecting coming? Just wanting to understand why the decel. Thank you.

We're certainly anticipating a strong Q2, as I outlined in my comments. And I think as we get through Q2, we'll have even more visibility on the second half. I've spoken before that sometimes it's difficult to have a really high degree of confidence more than six months out. But if we feel there's an opportunity to change any of our guidance, Toni, I think the best time for us to do that would probably be in March after we've gotten through Q2 and we've got more visibility on the second half pipeline.

Got it. Thank you.

Yes, especially, Tony, as you think about the back half, is always our bigger half. So we have greater visibility, that there are things we're continuing to track, like the larger deals. They can -- they -- some moved from Q1 to Q2, which Phil talked about. So I think it's really it's reflected in our wider range in terms ROI [ph]. So we have confidence that's reflected in our wider range.

Excellent. Thanks again.

Our next question comes from Hamzah Mazari with Jefferies.

Hi, this is Mario Cortellacci filling in for Hamzah. With the growth in your new customer, I think you said 6%. Just trying to maybe see if you can give us an update on the wealth channel and maybe you can actually help us have some perspective on the mix of the size of the client in that pipeline. I know you talked in the past about having chunkier opportunities and large opportunities in wealth. Does that make up the overwhelming majority of that pipeline or are there a lot of smaller wealth players that you can you can tap into? And has the mentality shifted in that space as we get much further into COVID?

Yes, hi, it’s Phil. So you're right in that there are some bigger chunky deals that are out there and those are usually binary and we continue to see a lot of enthusiasm from the marketplace around larger wealth deals and are exploring those moving forward. And we do see a high volume of smaller wealth deals as well. So with the combination of those two, plus the business that we have around digital, which is part of the wealth business line that we report out on. So there's a good, healthy mixture across that. What we do see, just in terms of the market on the wealth side is an increasing demand for more sophisticated tools for wealth advisors. We think that human element of wealth is still going to exist. I don't think it's going to be completely automated. But the clients of wealth are going to demand, I think, more insight from the wealth advisors moving forward and more of a personalized touch. So we're excited about some of the products that we have coming to market. We've released a new advisor dashboard product, which we have a lot of opportunities for in the pipeline that really does a great job of organizing our wealth advisors day. So we're able to sift through the hundreds of thousands of portfolios, that are wealth or millions of portfolios that our wealth shop is managing and really help a wealth advisor understand what she may or may not need to do that day in terms of an order of priority, in terms of dealing with their clients. And some of that's just good old FactSet software, some of it's also the increased use of cognitive computing to highlight some of those things for our clients. So this is an area that we're excited about. It's scenario -- if the market I think where we have some tailwinds and one that we're just going to continue to invest in.

And Mario, one of the outputs from our digital transformation project, so that you – I’ll call it as a proof point.

Great, thank you. And then just one more and I'll turn it over. Just on the Truvalue acquisition, you touched on the opportunity a little earlier. But maybe you can talk about how it's differentiated. You have other competitors that are a little more qualitative, you have ones that are quantitative. I mean, where does Truvalue sit in the competitive environment. And then also, it's kind of like you also have 20 maybe plus ESG providers or vendors on your platform. Why did you choose Truvalue over one of the other ones?

So Truvalue, was one of the first ESG providers to leverage the machine learning and artificial intelligence in its collection process. So I would say it's more on the quantitative side Mario. So what the product does is it comes through unstructured text and looks for signals within that unstructured test using cognitive computing. So this -- which we're very excited about. So it was kind of a two part acquisition. It wasn't just the ESG signals that Truvalue was creating, it was the technology that they also were using. And this is technology we believe we can apply to other parts of our business.

Great, thank you.

Our next question comes from David Chu with Bank of America.

Hi, thank you. So just in terms of pricing, have you made any concessions during the COVID for customers that had tough times during the period?

Hi, David, it's Phil. Few months ago there were certainly a few clients that we spoke to that anticipated they were going to have some difficulty moving forward. So there were a couple of cases where we dealt with some of our clients to do what FactSet does best during these periods, which is really think about the long-term relationship, understand what our clients are going through, and in some cases, adjust for that. So typically it will end up being a win-win for some shorter term concessions or conversations. We’ll also negotiate in terms of what that means for the longer term relationship. And that worked exceptionally well for us, over the last 20 years when clients are going through these types of issues. As I mentioned in the script, I think there's a lot more conviction in the markets now and a lot less uncertainty for all of us as we enter calendar year 2021. So I don't anticipate that we'll be having many more of those conversations.

Got it. That's helpful. And what are you hearing about client market data budgets, just wondering if COVID is having a material impact? Or is it going to be a relatively normal year?

I believe it's going to be a relatively normal year. Just going back to the comments I made, when -- around Toni's question is the clients are looking to consolidate their technology and data into a lower number of providers. And in some cases that may -- and that may be the lowest span for them as they face their cost pressures. But even in those cases, we are well-positioned to take market share. So when you sit down with a client and you're able to provide a holistic solution for them over the longer term, that can end up being a win-win if they can see ways to be more efficient and we can see ways to help them for the long run and improve the amounts of wallet share that they spend with us that's good for both the client and FactSet.

Got it, makes sense. Thank you.

The next question comes from Kevin McVeigh with Credit Suisse.

Great, thanks. Hey, Phil, you mentioned that kind of the demand for differentiated data has never been higher. But then sounds like your third party content costs were down in the quarter. Is that just some of the tech transformation or just any thoughts as to, so would think, more differentiated data would mean maybe more investment, but it seems like the third party content costs, you've been able to manage them pretty well. Any thoughts around those two dynamics?

Well, this -- when we -- our entire content costs are third party content. So things we may get from other providers. But they also -- we also spend a lot ourselves on technology, on content and investing in content. So I don't think the amount that we're investing for example in deep sectoral private markets would necessarily be represented in that third party content. Helen do you have more color on that?

Yeah, Phil happy to answer that. So we manage our budget pretty tightly. I would say we have more content set providers, but we've been very judicious in making sure that we're rationalizing them appropriately as well. Because that might be in the form of price, that might be in the form of where we have duplication that we are doing it more efficiently. But the actual number of content providers have increased from a third party perspective.

That’s helpful. And then just as you think about ESG from a client perspective into 2021, do you feel like you have the data set you currently need or would there be maybe more tuck in acquisitions? It just -- it seems like that's going to be an area more focused particularly amongst U.S. clients than what 2020 was?

There'll be more demand. So whether it's a third party, that we're able to integrate through the marketplace or through the workstation, or if there are other assets out there that makes sense for us to own directly we'll look at that. But I think you're right, that's the trend and we anticipate. We'll have more of it on Fact. And that's one of the beauties of our platform is that, people love the concordance and the fact that they can come into one environment and get everything in one place and apply software to those different contents.

Thank you.

Our next question comes from Shlomo Rosenbaum with Stifel.

Hi, good morning. Thank you for taking my questions. So maybe you could give a little bit more detail on some of the ASG drivers, and like where you saw some cancellations and some of the things that were -- comments that were in the press release about wealth management and analytics being slower growth versus the research product being faster. It -- will it be counter to what I kind of expected and what's actually driving the revenue right now? So probably maybe can you give us a little bit more detail on what's going on?

Sure. So hopefully, you can hear me above the ambulances that are outside my window, right now. The -- so yeah, those are relative numbers to last year Shlomo. So we're I think we're minus 7 and last year, we might have been minus 3 for Q1. So the research numbers were down, they typically are in Q1. You'll see some soon over there in terms of the banking relationships, because just the retention was higher than it was last year. We could see a little bit more weakness in analytics and wealth than we did in Q1 of last year. And CTS kind of held in there pretty well. So again, it's a small quarter. Those are relative numbers in terms of what's affecting the growth rate. I think what we see as we look out for Q2, which is typically a much bigger quarter is probably going to be a better indication just from an -- from an absolute contribution standpoint, which of our businesses are going to be driving the rest of the growth in the first half.

Okay. Then just could you talk a little bit about the selling environment? You've talked a lot about high confidence and it’s a fact your sales people are doing so much more remotely? Is that hampering anything at all? And I guess, if you kind of level set, the growth has been fairly the same over the last several quarters within several tens of basis points. Do you think, if we were not in COVID environment and your sales people were out there meeting people face to face, the growth would be higher, just trying to get some sense as to understand what kind of environment you feel like you're in?

I believe, it would have been higher over the last six to nine months, just intuitively. Moving forward though, I think we're probably getting to equilibrium. It's easier to sell to smaller clients in a short-term environment as we learn how to operate. So I think some of the momentum, you're going to see probably in Q2 is related to research and CTS as a core workstation, and the feeds business. But as we look out for the rest of the year, we're learning how to interact with clients, as I mentioned, like that these blueprinting exercises, we were able to do those virtually. And typically, those are more analytics heavy, right, in terms of the workflow going from research all the way through the client reporting. So FactSet and our clients have been learning at the same time. And I do you think we're going to reach a nice equilibrium in terms of being able to effectively monetize some of the products that are more sophisticated and have a longer sales cycle.

Okay. Thank you.

Our next question comes from Alex Kramm with UBS.

Yeah, hey, Good morning, everyone. Just a quick follow-up on the question just prior. On cancellations in particular, can you give us a little bit more detail of what you're seeing, what type of clients and also what kind of services and why? And I think you highlighted EMEA as particularly an area of elevated cancellations if I read that correctly. So again, same question what exactly are you seeing and like what type of products? What type of clients and the region?

There were a couple of lumpier cancels in EMEA, Alex, I believe were hedge funds. Helen, I don't know if you've got any more detail on…

Yes. I think that's right. I mean, this is a low quarter. So when you have something that cancels Alex, it becomes more impactful. So yes, I would say to clients that are in that hedge fund space with reduction. So that said, that EMEA [ph] impacts more in this quarter and then maybe into other quarter. And I think what we talked a bit about is the slowdown in decision making so often we would new wins offsetting that as well. But I wouldn't say there’s a concentration in any particular type of businesses, or cancellation of anything the one that Phil talked about earlier, is that in research, we saw better than in previous years or at least previous year in terms of cancellation outlook.

Fair enough. And then just another quick one on deep sector, I don't think you gave us an update today. I think you've been at this journey for what two years or so now. Any updates on take up, but also any more specific numbers you can put around this at this point in terms of how much does this contribute to ASV as this, I think should be an area -- one of your growth areas going forward?

We're about 15 months in Alex to this initiative. And we're very pleased with what we've been able to accomplish on the product side. So the team is fully built out. And we're well on our way to delivering two or three of those sectors in great detail. So where you're going to see that show up at the beginning is in the research numbers. So it's going to help with retention, particularly on the banking side. And over time, I believe it's going to help drive new adoption across all types of clients and we're also going to be able to monetize this data in feeds. So we'll be releasing pretty shortly, some deep sector feeds that would show up in the CTS number.

Very good. Thank you.

Our next question comes from Ashish Sabadra with Deutsche Bank.

Thanks for taking my question. Maybe Helen, a quick clarification, do you provide the cost saving from lower T&E because of the ongoing pandemic if there's a way to quantify that?

Sure. And are you talking about longer term or are you talking this quarter’s specifically?

Yes. Just the quarter.

Yeah, so in this quarter, I would say it's sort of a continuation of what we saw last year. So I would say it's around a point of savings if I just look at it purely year-over-year. That being said, we did -- we covered -- used that to help cover some of our higher expense as well in both compensation as well for our technology spend.

That's helpful, and then Helen, also on the longer term, how should we think about what's the -- how should we think about this permanent reduction going forward?

Yeah, well, that in a normal environment that's a little bit of a hard one that we are looking to get back into that, and that will be beyond this year. We think that's around 25 maybe 50 basis points. Let's compare that to 2019 in a more normal environment. Then I would say that's benefit we can see come through. I would look to that, whether that comes purely in funding some of our new initiatives in that, that we'll be seeing that, that's where I want to see more permanent structural change.

That's very helpful. And maybe a quick clarifying question on the headcount growth in sales and content, particularly on the sales side. I was wondering if you could provide any color on any geographies or verticals or products that you're more focused on the sales front. And same on the content side, is it part of the deep sector strategy? Any color on both of those fronts? Thanks.

I'll take a shot at that. So as we think about our sales front, I think Phil mentioned this earlier, and also talked about in our last call. It is in areas that we believe we have a lot of opportunities. So in CTS for example, where we've invested more on sales front, upselling in new business and corporate is another area. So it's not necessarily any particular geography, it's much more where we feel that we had some good opportunities to reach our resources in that area. On the content side, I think that is in a couple of different places. Yes, this is actually where we put the most, but also I think in the areas of private markets, as we are spending more of our investment.

That's very helpful. Thanks.

You’re welcome.

Our next question comes from George Tong with Goldman Sachs.

Hi, thanks. Good morning. I wanted to drill in a bit deeper into the selling environment. You provided some details on cancellations in the quarter. Can you elaborate on where you're seeing longer sales cycles and how client budgets are evolving on average year-over-year?

George, I think I talked about that a little bit with Shlomo. So the sales cycle for our analytics suite, when we do the portfolio life cycle and sit down with a client to talk about their entire digital transformation, that can be a six month plus exercise, whereas the sales cycles for just deploying FactSet workstations or feeds are probably getting shorter, frankly, just because it's so much more efficient to do things virtually.

And then the question on client budgets, how are those evolving on average year-over-year?

We don't have visibility into client budgets exactly on what their -- the clients typically don't share that with us at that level of detail. So it's really hard for us to give you an accurate number.

Got it, okay. So…

The way to think of it is [technical difficulty] and there's the BAU [ph] on the business budget under the digital transformation budget. So where are we --Phil is exactly right, we don't ask our client number [ph] or anything like that, but they are clearly spending more also in that second budget and that's where a lot of the conversation Phil was alluding to in [indiscernible] that's where that is more focused on.

Got it. That’s helpful. And just as a follow-up question, customer count in the quarter grew faster than ASV, similar to earlier periods, and you noted that you've been seeing more wealth and more corporate clients. Can you elaborate on the spending propensity of these clients relative to other types of clients?

The spending capacity of smaller clients, is that your question?

The spending propensity of wealth and corporate clients which appear to be growing faster than other types of clients.

I think those are typically smaller clients that we sell, George. So those are I think typically with a smaller client, they're able to make a decision more quickly. And on the corporate side, I think typically we've seen that sale cycle to be pretty short again, because it's going to be a workstation type deal rather than a broad analytics conversation that we might have with an asset owner or an asset manager.

Got it. Thank you.

Our next question comes from Jake Williams with Wells Fargo.

Good morning, everyone.

Good morning.

Can we assume that this is Truvalue Lab acquisition indicates an increased focus on owning data in the CTS space as opposed to reselling or do you think you'll take more of a continued hybrid approach moving forward?

Well, this is just a continuation of the last few decades. So FactSet has a lot of proprietary data that we collect ourselves and half of our employees are in the business of collecting or engineering the collection of content. So Truvalue is really very small compared to the overall content budget or strategy that we have. It's a very good indication of something that we can act on. That's where the current trends. But it's going to be like it's been for the last 10 or 20 years in terms of us integrating more and more data onto our platform, either through third parties, through data that we collect ourselves organically or through acquisitions. But it's hard to draw any real conclusions from such a small acquisition.

Got it. Thank you very much.

Our last question comes from Keith Housum with Northcoast Research.

Good morning, guys. Just wanted to drill down a bit further on a Truvalue acquisition. I know you had a lot of questions already. But the run rate here is $5 million. So I guess first question is that pretty much all the revenue that comes with Truvalue and then does this give you the foothold you need in ESG, or do you need to do a tack-on acquisitions in order to make this a bigger part of your business and part of your strategy going forward?

Well, it's an asset that we're very excited about. I think you've got the number right, and it's one that's growing in very healthy double digits. So we think we can -- like some of the unique content that we've acquired over the years, the Revere Data set was a good example. We believe we can get a really amplified return for unique content like this if you integrate it through the FactSet platform. ESG is going to be a big trend. We believe that's going to continue, so we'll keep our eye out for other things that we believe it's important for us to own. But more importantly, we want to be that platform where people come to analyze the data if they want to not just get it through a feed or an API examine for example, but apply what FactSet does really well which is concur the data together and provide an environment where clients can really analyze the data the way that they wanted it.

Got you. And changing gears I guess, slightly here to your guidance. How much of your guidance is dependent in terms of going back to work sometime during the fiscal year? Or what is your assumption in terms of returning back to work in the fiscal year?

I don't think it’s -- well go ahead Helen.

I don't think anything has changed. At this juncture, we were assuming that maybe it's more of back half of the year, more of a return. And that will be more from a cost perspective than anything [technical difficulty] we're operating quite well. And also from the way we’ve been performing the last three quarters.

Great. Thank you.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Phil Snow for any closing remarks.

Thank you all for joining us today. I'm encouraged by the conversations we're having with our largest clients and the continued progress our team has made on our investment plan. I look forward to executing on a robust pipeline and to continuing to help our clients solve problems and access critical data anytime anywhere. While the prolonged uncertainty makes our annual performances it has been in the past a tale of two halves. We remain focused on developing our content, technology and people as well as delivering value for our shareholders. Please be well this holiday season and if you have any additional questions call Rima Hyder. We look forward to speaking to you next quarter. Operator, that ends today's call.

Ladies and gentlemen, this does conclude today's presentation you may now disconnect and have a wonderful day.