Summary
Fair Isaac Corporation (FICO) reported revenues of $605.6 million for the fiscal year ended September 30, 2010, a decrease of 4% from the prior year, reflecting challenges in the banking and insurance sectors due to the lingering effects of the 2008 financial crisis. Despite the revenue decline, the company managed operating expenses effectively, leading to a slight decrease in operating income to $113.3 million. The company continues to invest in its core 'Decision Management' strategy, which aims to provide integrated solutions for decision automation across various industries. FICO's business is diversified across three segments: Applications, Scores, and Tools, serving major clients in banking, insurance, retail, and healthcare. The company's financial health remains solid, with a substantial amount of cash and equivalents and manageable debt levels. However, the company faces ongoing risks related to its reliance on key customers, competition from credit reporting agencies, and the long sales cycles for its complex solutions. Future growth is expected to be driven by the adoption of its Decision Management solutions and expansion into new markets and international regions.
Financial Highlights
57 data points| Revenue | $605.64M |
| Cost of Revenue | $180.93M |
| Gross Profit | $424.71M |
| R&D Expenses | $73.58M |
| SG&A Expenses | $225.26M |
| Operating Expenses | $492.29M |
| Operating Income | $113.35M |
| Interest Expense | $24.12M |
| Net Income | $64.46M |
| EPS (Basic) | $1.44 |
| EPS (Diluted) | $1.42 |
| Shares Outstanding (Basic) | 44.90M |
| Shares Outstanding (Diluted) | 45.31M |
Key Highlights
- 1Revenue decline of 4% to $605.6 million in FY 2010, primarily due to a challenging economic environment impacting key customer industries like banking and insurance.
- 2Operating income decreased slightly by 3% to $113.3 million, demonstrating FICO's ability to manage expenses amidst revenue pressure.
- 3The company is focused on its 'Decision Management' strategy, offering integrated solutions that combine analytics, data management, and software for business decision automation.
- 4FICO's revenue is significantly derived from transactional and maintenance-based arrangements (approximately 75% in FY 2010), indicating a recurring revenue stream.
- 5International revenues represented 35% of total revenues in FY 2010, highlighting FICO's global presence and potential for future growth abroad.
- 6The company repurchased a significant amount of its common stock in FY 2010 ($198.0 million), reflecting a commitment to returning capital to shareholders.
- 7FICO is involved in ongoing litigation with Experian regarding competitive credit scoring products, which could materially impact future relationships and operations.