10-KPeriod: FY2013

FAIR ISAAC CORP Annual Report, Year Ended Sep 30, 2013

Filed November 12, 2013For Securities:FICO

Summary

Fair Isaac Corporation (FICO) reported a 10% increase in total revenues to $743.4 million for fiscal year 2013, driven primarily by acquisitions and growth across its Applications, Scores, and Tools segments. While revenue increased, operating income saw a slight decrease of 4% to $161.6 million, attributed to the integration of lower-margin offerings from recent acquisitions. Net income also declined by 2% to $90.1 million, resulting in diluted earnings per share of $2.48. FICO continues to invest in cloud-based solutions and returned capital to shareholders through a stock repurchase program. The company's strong market position in credit scoring and decision management systems supports its diversified revenue streams across banking, insurance, retail, and healthcare sectors.

Financial Highlights

55 data points
Beta

Revenue

$743.44M

69.1% Gross Margin

Net Income

$90.09M

12.1% Net Margin

EPS (Diluted)

$2.48

Total Assets

$1.16B

Cash & Equivalents

$83.18M

Free Cash Flow

$111.97M

Financial Statements
Beta
Revenue$743.44M
Cost of Revenue$229.47M
Gross Profit$513.98M
R&D Expenses$66.97M
SG&A Expenses$268.39M
Operating Expenses$581.85M
Operating Income$161.59M
Interest Expense$30.23M
Net Income$90.09M
EPS (Basic)$2.55
EPS (Diluted)$2.48
Shares Outstanding (Basic)35.33M
Shares Outstanding (Diluted)36.29M

Key Highlights

  • 1Revenue grew by 10% to $743.4 million in fiscal year 2013, primarily driven by strategic acquisitions.
  • 2Operating income decreased by 4% to $161.6 million due to integration costs from acquisitions, despite revenue growth.
  • 3Net income fell by 2% to $90.1 million, with diluted EPS at $2.48.
  • 4The company actively repurchased shares, spending $84.9 million in fiscal year 2013 under its ongoing stock repurchase program.
  • 5International revenues accounted for 40% of total revenues, indicating a balanced geographic presence.
  • 6FICO continues to invest in its core technologies, with a focus on cloud computing and SaaS to expand market opportunities.
  • 7The company completed multiple strategic acquisitions in fiscal years 2012 and 2013, integrating capabilities in customer engagement, collections, and entity resolution.

Frequently Asked Questions

FICO's revenue in fiscal year 2013 was primarily driven by its Applications segment, which saw a 12% increase, followed by the Tools segment with a 14% increase and the Scores segment with a 3% increase. Acquisitions completed in fiscal years 2012 and 2013 significantly contributed to the revenue growth, particularly in the Applications segment.

The decrease in operating income was primarily attributed to the integration of lower-margin product and service offerings associated with recent acquisitions. These integration costs and adjustments impacted the company's profitability despite the overall revenue increase.

FICO is managing its capital by continuing to invest in its franchise technologies, particularly in cloud computing and SaaS. Additionally, the company actively returns capital to shareholders through its stock repurchase program, demonstrating a commitment to enhancing shareholder value.

Key risks identified include the potential for its Decision Management strategy to not be successful, reliance on a few key products and customers, inability to access new markets or develop new distribution channels, potential defects or delays in new product introductions, and the impact of global economic conditions and regulatory changes on its core industries like banking and insurance.