10-KPeriod: FY2016

FAIR ISAAC CORP Annual Report, Year Ended Sep 30, 2016

Filed November 10, 2016For Securities:FICO

Summary

Fair Isaac Corporation (FICO) demonstrated robust performance in fiscal year 2016, with total revenues growing 5% to $881.4 million. The company's strategic focus on expanding its Decision Management strategy and transitioning to cloud-based solutions appears to be yielding positive results, particularly in its Scores segment, which saw a significant 16% revenue increase year-over-year. This growth was driven by the company's business-to-consumer services and its expansion through partnerships like the one with Experian. Profitability also saw a substantial improvement, with operating income increasing by 23% to $169.6 million and operating margin expanding to 19%. This was supported by a higher proportion of revenue from higher-margin products and a reduction in restructuring costs compared to the previous year. FICO also returned value to shareholders through a substantial stock repurchase program, highlighting its strong cash flow generation. The company's continued investment in research and development and strategic acquisitions, such as QuadMetrics, signals a commitment to innovation and future growth.

Financial Highlights

52 data points
Beta

Revenue

$881.36M

69.9% Gross Margin

Net Income

$109.45M

12.4% Net Margin

EPS (Diluted)

$3.39

Total Assets

$1.22B

Cash & Equivalents

$75.93M

Free Cash Flow

$188.30M

Financial Statements
Beta
Revenue$881.36M
Cost of Revenue$265.17M
Gross Profit$616.18M
R&D Expenses$103.67M
SG&A Expenses$328.94M
Operating Expenses$711.76M
Operating Income$169.59M
Interest Expense$26.63M
Net Income$109.45M
EPS (Basic)$3.52
EPS (Diluted)$3.39
Shares Outstanding (Basic)31.13M
Shares Outstanding (Diluted)32.31M

Key Highlights

  • 1Total revenues increased by 5% to $881.4 million in fiscal year 2016.
  • 2Operating income grew by 23% to $169.6 million, with operating margin improving to 19%.
  • 3The Scores segment was a key driver of growth, with a 16% revenue increase, largely due to business-to-consumer services and partnerships.
  • 4The company repurchased approximately $138.4 million of its common stock in fiscal year 2016.
  • 5Investments in cloud-based solutions and strategic acquisitions, like QuadMetrics, underscore FICO's focus on innovation and market expansion.
  • 6Despite strong performance, international revenue decreased slightly to 36% of total revenue from 40% in the prior year.

Frequently Asked Questions

In fiscal year 2016, Fair Isaac Corporation (FICO) reported a 5% increase in total revenues, reaching $881.4 million. The Scores segment was the strongest performer, experiencing a significant 16% revenue increase, primarily driven by its business-to-consumer services and strategic partnerships.

FICO showed improved profitability in fiscal year 2016. Operating income rose by 23% to $169.6 million, and the company's operating margin expanded from 16% to 19%. This improvement was attributed to a greater contribution from higher-margin products and a reduction in restructuring-related expenses.

FICO is actively expanding its traditional on-premises software offerings to cloud-based solutions, available through the FICO Analytic Cloud and third-party environments. This strategy aims to capture growth opportunities with customers seeking more affordable and simpler solutions. Additionally, FICO made strategic acquisitions, such as QuadMetrics, to bolster its cyber-related analytics capabilities and strengthen its product portfolio.

Fair Isaac Corporation returned value to its shareholders through its stock repurchase program. In fiscal year 2016, the company repurchased approximately 1.3 million shares for $138.4 million. As of September 30, 2016, there was $230.0 million remaining under its existing stock repurchase authorization.