Lower marketing and professional fees was driven by keeping the investment levels consistent with last year while growing the revenue base.

In August 2007, the company granted 1.5 million employee stock options.

Like the last year, up to 63% of the options granted vest only if certain company performance metrics are achieved over the next two fiscal years. The company''s progress toward obtaining these performance metrics could change the stock option expense in future quarters.

Employee count as of August 31, 2007 was 1,653, up 23% from a year ago.

- Total sales force grew approximately at the rate of revenue.
- Other income grew to $2.4 million, up 66% versus the fourth quarter last year.
- Higher cash balances and interest rates drove this increase.

The effective tax rate for the quarter was 31.8%.

This rate can be broken down into 34.2% from recurring operations, offset by a benefit of 2.4% from recognizing a tax benefit for prior periods related to repatriation of foreign earnings to the U. S.

In fiscal 2007, the company crossed over the $500 million mark in annual subscription and added more than 200 basis points to its annual revenue growth rate.

The current 35,000 FactSet user base represents just 7% of the professional investment user community.

Key questions and answers from the fourth quarter fiscal 2007 earnings call conducted by FactSet Research Systems, Inc. (FDS: chart) on September 25th, 2007.

Peter Appert (Goldman Sachs): It looks like the momentum in terms of clients and users for the Portfolio Manager Workstation accelerated here in the most recent quarter. Any thoughts on what might be driving that?

Philip A. Hadley: If you are going to look at change in trajectory of total seats, we have built out our sales force on a specialty basis pretty substantially throughout the year to focus on particular product lines. The fourth quarter illustrates success in that area in penetrating current clients and diverting them in that particular product line.

Peter Appert (Goldman Sachs): Can you give us any specifics in terms of number of sales people, specifically today versus a year ago?

Peter G. Walsh: Yes. We grew our sales force approximately at the rate of revenue growth versus a year ago.

Peter Appert (Goldman Sachs): How about number of salespeople?

Peter G. Walsh: We broke the company in a third of sales consulting, a third of engineering and cost development and a third of content collection and administrative functions.

Peter Appert (Goldman Sachs): Any thoughts on the development of the fixed income product? I understand it’s a small component of the business currently but just the traction you are seeing there and whether there’s any push back from clients in the context of just the turmoil we are seeing in the debt markets currently?

Philip A. Hadley: You are correct, it is still immaterial as far as fact that goes, it''s moving nicely in the PA product line, for PA fixed-income and we are continuing to focus on the standalone products as well, but it’s still single digits for us as far as total ASPs. As far as the turmoil in the credit markets, our exposure is so low that it’s hard for me to even make a comment at this point.

Peter Appert (Goldman Sachs): Are you hearing anything back from customers in terms of the turmoil in the capital markets that might suggest the greater resistance to adding terminals going into fiscal ’08?

Philip A. Hadley: I haven’t seen anything yet. 75% of our business is the buy side, and if you look at the U. S. market, all the markets, our major indices are still up for the year which bodes well for us. If we get to the sell side you have the equity research department which is more tied to the buy side and then you get to the investment banking areas. I think you have seen mixed results firm by firm as to what the year turned out to be. So I think we have still got such a huge upside and such a small spend in part of these firms, and in addition to which I think that firms are continuing to consolidate under our product lines and simplifying their IT spend choosing FactSet.

Peter Appert (Goldman Sachs): Is this year’s share buyback pace a good indication of what we should look for next year?

Philip A. Hadley: We are constantly evaluating how best to return our profits to the shareholders. We increased our dividends. Share repurchases is certainly a mechanism in addition to M&A activities. I think since we are such a cash flow positive business you’ll continue to see us optimize those three as best as we best feel would be for the shareholders.

Peter Appert (Goldman Sachs): Any particular new products or new product offerings or product line extensions we should be focused on over the next 12 months that could be drivers of revenues?

Philip A. Hadley: Our entire product line is incrementally enhancing everything we already do. Marquee is a great example. We have been incrementally enhancing that since we released the product three or four or five years ago. At this point, it will continue to get enhancements like any other product line. So for something to be a driver of revenue it''s probably got a five year run before it gets to the point where it really is a contributor from what you think of as the contributor. So, we invest heavily in our products.

Unidentified Analyst: Can you give us a sense of the mix of your new users? Is that still coming in as a 75% investor management, 25% banking split? How do you think about new users coming from your existing clients versus new clients?

Philip A. Hadley: If you were going to look at our seat and client growth, it is always going to be lumpy to some degree. Large clients can make broad decisions that affect our seat counts quarter-to-quarter. As a whole, I am pleased with the year because our seat count accelerated.

I would say the majority of our seat count is with existing clients. Most clients come on with a small seat count, and then over the years expand.

Unidentified Analyst: How should we think about your margins going forward? In the past you''d talked about reinvesting the upside, but this year your top line growth was outpaced by the bottom line. Was there anything unusual about ’07 that you were able to generate so much leverage? Should we expect more of a top line growth to track the bottom line, maybe as we look out over the next few years?

Peter G. Walsh: When you look at ’07, two things helped the relationship of bottom line versus top line, and that was other income was up consistently in strong percentage of 56% in the most recent quarter year-over-year due to our higher cash balances, and real higher interest rate. Also our effective tax rate dropped, we ended last year at just a little north of 36% and the current rate for the year was 34.2%. We are really managing the company for our revenue top line growth and bottom line growth to be more consistent than what they were in 2007. And it''s hard to predict but I think our other income and improvements in the pipeline will continue at the rate we saw this year.

Unidentified Analyst: Your margins did expand at least this past year. How should we think about that going forward and how does that balance out your reinvestment strategy?

Peter G. Walsh: We have been managing the company for our margins to be flat. And we are managing that primarily through investing back into the product. That investment comes in two forms. One is people, which you see in that we increased our headcount by 23% and the other form is expanding some of the contents that is available in FactSet either through third parties or through what we build by ourselves.

John Neff (William Blair & Company): You described about 63% of the options that you granted are performance vesting based, not just time vesting. Can you describe what the key performance metrics are that you use to track that vesting?

Peter G. Walsh: Last year we introduced performance based options because we thought it was really important to balance the needs of our employees and also our shareholders to important constituents. The performance based options vest over a two year period, if we attained metrics that relate either to our growth of ASP or net income. So, those metrics would be the lower of one of the those two items, over a two-year period.

John Neff (William Blair & Company): Could you describe the growth in employees as they have been concentrated in one bucket or the other of a third you mentioned. Is there a geographic concentration of that growth and what might you expect for hiring growth in ’08?

Philip A. Hadley: As far as looking back at ’07, there wasn’t a concentration in any one discipline when you compare it on content collection, sales and consulting and/or engineering product development. From a geographic point of view we added more employees non U. S. than we did in the U. S. and that reflects what we think is the opportunity in those relative markets. Going forward, we will continue to invest heavily in headcount and our current plans are to keep our headcount investment and our revenue growth rate in very similar zip codes.

John Neff (William Blair & Company): Regarding your CapEx guidance of $38 million to $44 million in ’08, is there any implicative real estate or consolidation expenses in there?

Philip A. Hadley: When you are moving as opposed to expanding an office, you are going to spend more money in CapEx. I would add that the CapEx guidance also would include our upgrading from one version of HP’s mainframe to another and it would also follow if CapEx is higher doing a year of upgrade versus a year of just adding to or expanding the number of mainframes that are necessary based on client demand.

John Neff (William Blair & Company): The DSOs looked as if they just plunged in the quarter. In the last quarter you started invoicing it before month-end there was a change. Can you just walk us through the impact that had this quarter if any on DSOs? What sort of sustainable level for DSOs we should think about? Is it third quarter number or the fourth quarter number you just ordered today?