Fair Isaac Corporation ((FICO)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Fair Isaac Corporation (FICO) recently held its earnings call, revealing a generally positive sentiment driven by strong financial performance and innovative advancements. Despite some challenges, such as a flat performance in the Software segment and uncertainties in mortgage volume predictions, the overall outlook remains optimistic.
Strong Financial Performance
FICO reported impressive financial results, with fourth-quarter revenues reaching $516 million, marking a 14% increase compared to the previous year. The full fiscal year revenue stood at $1.991 billion, up 16% from the prior year, alongside a record annual free cash flow, highlighting the company’s robust financial health.
Scores Segment Growth
The Scores segment demonstrated significant growth, with fourth-quarter revenues hitting $312 million, a 25% increase year-over-year. For the full year, revenues soared to $1.169 billion, a 27% rise, primarily driven by the success of B2B scores.
Innovation in FICO Platform
FICO announced the general availability of its next-generation platform and marketplace. The introduction of FICO FFM, a domain-specific AI model, achieved a remarkable 35% lift in transaction analytic models, underscoring FICO’s commitment to innovation.
Record Share Repurchases
The company made history with its share repurchase program, buying back 833,000 shares for $1.41 billion during fiscal 2025, the highest annual repurchase level in FICO’s history.
Flat Software Segment Performance
The Software segment’s performance was flat, with revenues of $204 million in Q4, unchanged from the previous year. This was partly due to a 7% decline in non-platform revenue, attributed to the phasing out of legacy products.
Challenges with Predicting Mortgage Volumes
FICO expressed caution in its guidance due to uncertainties in the macro environment and mortgage volumes. Potential reductions are anticipated due to factors like trigger leads and fluctuating interest rates.
Forward-Looking Guidance
Looking ahead, FICO provided a comprehensive outlook for fiscal 2026, projecting an 18% revenue increase to $2.35 billion and a 22% growth in GAAP net income to $795 million. Non-GAAP net income is expected to rise by 24% to $907 million, with earnings per share anticipated to grow by 26% and 28% for GAAP and non-GAAP, respectively. The company foresees software SaaS growth driven by the FICO platform and stable professional services revenue.
In summary, FICO’s earnings call reflected a strong financial performance and a positive outlook, driven by significant growth in the Scores segment and innovative advancements. While challenges remain, particularly in the Software segment and mortgage volume predictions, the company’s forward-looking guidance suggests continued growth and resilience.