AI Takeaway
FDS delivered solid Q1 FY2026 revenue growth of 6.9% to $607.6M, but operating margin contracted 200 bps to 31.6% as cost of revenue rose 11.3%, while operating cash flow surged 40.4% and the company returned $181.3M to shareholders via buybacks and dividends.
Revenue
$607.62M
++6.85% YoY
EPS (Basic)
$4.08
++3.29% YoY
Operating Income
$192.07M
++0.38% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
FDS grew total revenue 6.9% year-over-year to $607.6M in Q1 FY2026, up from $568.7M in the prior-year period, reflecting continued demand for financial data and analytics solutions across its client base.
Source: Source: 10-Q Income Statement
Cost of revenue rose 11.3% YoY to $287.9M, outpacing revenue growth of 6.9%, which compressed gross profit margins and contributed to a 200 bps decline in operating margin from 33.6% to 31.6%. SG&A also increased 7.7% to $127.6M, adding further pressure.
Source: Source: 10-Q Income Statement
Operating cash flow surged 40.4% YoY to $121.3M from $86.4M, driven in part by a 23.6% increase in D&A to $44.1M, indicating robust underlying cash earnings power despite margin compression.
Source: Source: 10-Q Cash Flow Statement
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Upgrade to unlockCost of revenue grew 11.3% YoY versus revenue growth of only 6.9%, causing operating margin to contract 200 bps to 31.6%. If cost inflation in data sourcing, technology infrastructure, or personnel continues to outpace revenue growth, profitability could deteriorate further.
Source: Source: 10-Q Income Statement
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $4.51 versus the $4.41 analyst consensus — a +2.2% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $607.62M | $568.67M | +6.85% |
Cost of Revenue | $287.92M | $258.78M | +11.26% |
Operating Income | $192.07M | $191.34M | +0.38% |
Net Income | $152.58M | $150.02M | +1.71% |
EPS (Basic) | $4.08 | $3.95 | +3.29% |
EPS (Diluted) | $4.06 | $3.89 | +4.37% |
SG&A Expense | $127.63M | $118.55M | +7.66% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $4.22B | $4.05B | +4.25% |
Current Assets | $708.57M | $750.7M | -5.61% |
Total Liabilities | $2.05B | $2.06B | -0.20% |
Current Liabilities | $458.77M | $538.14M | -14.75% |
Stockholders' Equity | $2.17B | $1.99B | +8.85% |
Cash & Equivalents | $275.45M | $289.17M | -4.74% |
Long-Term Debt | $1.37B | $1.36B | +0.71% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $121.28M | $86.37M | +40.42% |
Investing Cash Flow | $4.33M | $-145.06M | +102.98% |
Financing Cash Flow | $-190.51M | $-70.07M | -171.88% |
Dividends Paid | $41.41M | $39.25M | +5.52% |
Share Buybacks | $139.9M | $48.79M | +186.74% |
D&A | $44.15M | $35.72M | +23.61% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 31.6% | 33.6% | -2.04% |
Net Margin | 25.1% | — | — |
ROE | 7.0% | — | — |
ROA | 3.6% | — | — |
Current Ratio | $1.544 | — | — |
Debt to Equity | $0.947 | — | — |
FDS reported Q3 FY2026 revenue growth of 6.4% to $622.9M, but net income fell 14.7% to $126.7M as a 30.5% surge in SG&A expenses and higher cost of revenue compressed operating margin by ~640 basis points to 26.7%.
FDS delivered 7.1% revenue growth in Q2 FY2026 to $611.0M, but net income fell 8.1% to $133.1M as rising costs and higher SG&A compressed margins and weighed on EPS.
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FDS reported Q1 FY2026 revenue of $607.6M, up 6.9% YoY, and net income of $152.6M, up 1.7% YoY. Diluted EPS came in at $4.06, a 4.4% increase from $3.89 in the prior-year quarter, supported by share buybacks.
FDS's operating margin fell approximately 200 basis points YoY to 31.6% in Q1 FY2026, as cost of revenue grew 11.3% and SG&A rose 7.7%, both outpacing revenue growth of 6.9%. This cost inflation compressed gross and operating profitability despite solid top-line expansion.
FDS returned approximately $181.3M to shareholders in Q1 FY2026, including $139.9M in share buybacks (up 186.7% YoY) and $41.4M in dividends (up 5.5% YoY). This aggressive capital return program significantly reduced the share count, boosting diluted EPS growth above net income growth.
FDS maintains a solid financial position with a current ratio of 1.54x, stockholders' equity of $2.17B (up 8.9% YoY), and operating cash flow of $121.3M. Long-term debt of $1.37B and a debt-to-equity ratio of 0.95x represent moderate leverage, while cash and equivalents of $275.4M provide a reasonable liquidity buffer.
Based on the financial data, the key risks for FDS include margin compression from costs growing faster than revenue, elevated leverage with $1.37B in long-term debt, and declining cash reserves as the company aggressively returns capital to shareholders. Operating income grew only 0.4% despite 6.9% revenue growth, underscoring the pressure on profitability.