10-KPeriod: FY2020

FAIR ISAAC CORP Annual Report, Year Ended Sep 30, 2020

Filed November 12, 2020For Securities:FICO

Summary

Fair Isaac Corporation (FICO) reported a strong fiscal year 2020, with total revenues increasing by 12% to $1.29 billion. This growth was largely driven by a significant 25% surge in the Scores segment, reaching $528.5 million in revenue, and continued expansion in cloud-based SaaS offerings across its Applications and Decision Management Software segments. The company's strategic focus on its cloud-enabled, platform-based approach is showing positive results, with cloud bookings increasing to 41% of total bookings. FICO also demonstrated solid operational performance, with operating income rising 17% to $296.0 million and diluted earnings per share increasing by 25% to $7.90. The company continued to return value to shareholders through its stock repurchase program. Despite a challenging economic environment influenced by COVID-19, FICO navigated the period effectively, maintaining operational flexibility and a strong balance sheet. While certain segments experienced adverse impacts, the overall financial health and strategic execution indicate a resilient business model poised for continued growth.

Financial Highlights

53 data points
Beta

Revenue

$1.29B

72.1% Gross Margin

Net Income

$236.41M

18.3% Net Margin

EPS (Diluted)

$7.90

Total Assets

$1.61B

Cash & Equivalents

$157.39M

Free Cash Flow

$342.93M

Financial Statements
Beta
Revenue$1.29B
Cost of Revenue$361.14M
Gross Profit$933.42M
R&D Expenses$166.50M
SG&A Expenses$420.93M
Operating Expenses$998.59M
Operating Income$295.97M
Interest Expense$42.18M
Net Income$236.41M
EPS (Basic)$8.13
EPS (Diluted)$7.90
Shares Outstanding (Basic)29.07M
Shares Outstanding (Diluted)29.93M

Key Highlights

  • 1Total revenues increased 12% to $1.29 billion in fiscal year 2020.
  • 2The Scores segment experienced robust growth, with revenue up 25% to $528.5 million.
  • 3Cloud bookings represented 41% of total bookings, indicating successful adoption of the SaaS strategy.
  • 4Operating income grew 17% to $296.0 million, with operating margin improving to 23%.
  • 5Diluted earnings per share increased by 25% to $7.90.
  • 6The company repurchased approximately $235.2 million of its common stock during fiscal year 2020.
  • 7FICO recorded restructuring and impairment charges of $45.0 million related to office space consolidation due to post-pandemic workforce patterns.

Frequently Asked Questions

FICO reported a 12% increase in total revenues for fiscal year 2020, reaching $1.29 billion. This growth was primarily driven by a strong performance in its Scores segment, which saw a 25% revenue increase to $528.5 million, and continued expansion in its cloud-based SaaS offerings across the Applications and Decision Management Software segments.

While the COVID-19 pandemic presented challenges, FICO demonstrated resilience. The company implemented work-from-home protocols and managed operational flexibility. However, certain business areas, particularly within the Applications and Decision Management Software segments, experienced adverse impacts on customer purchasing decisions. The Scores segment saw mixed effects, with declines in auto and unsecured originations but an increase in mortgage volumes. FICO also incurred impairment charges related to office space consolidation due to anticipated post-pandemic workforce changes.

FICO is actively pursuing a cloud-enabled, platform-based strategy. This includes investing in product development for its SaaS-based offerings on its platform, leading to an increase in cloud bookings, which accounted for 41% of total bookings in fiscal 2020. The company is transitioning many of its on-premises software solutions to SaaS offerings hosted on its FICO Analytic Cloud and AWS.

FICO is returning value to shareholders through its ongoing stock repurchase program. In fiscal year 2020, the company repurchased approximately 0.7 million shares for $235.2 million, and had $224.8 million remaining under its current authorization as of September 30, 2020.