10-KPeriod: FY2021

FAIR ISAAC CORP Annual Report, Year Ended Sep 30, 2021

Filed November 10, 2021For Securities:FICO

Summary

Fair Isaac Corporation (FICO) reported solid financial performance for the fiscal year ending September 30, 2021. The company demonstrated revenue growth, driven primarily by its Scores segment, which saw a significant increase of 24%. This growth was fueled by higher unit prices and increased volumes in both business-to-business and business-to-consumer offerings. The Software segment experienced a revenue decline, largely due to a strategic shift towards platform-first, cloud-delivered solutions and the divestiture of non-core businesses, impacting year-over-year comparisons. Financially, FICO reported a substantial increase in operating income and net income, boosted by gains from business divestitures. The company also continued its commitment to enhancing shareholder value through robust share repurchase programs, spending $882.2 million in fiscal year 2021. The company ended the fiscal year with a healthy cash position and has adequate liquidity to fund its operations and future growth initiatives, supported by its revolving credit facility. Management remains focused on advancing its platform strategy and investing in high-value, strategic areas of the business.

Financial Highlights

53 data points
Beta

Revenue

$1.32B

74.7% Gross Margin

Net Income

$392.08M

29.8% Net Margin

EPS (Diluted)

$13.40

Total Assets

$1.57B

Cash & Equivalents

$195.35M

Free Cash Flow

$416.25M

Financial Statements
Beta
Revenue$1.32B
Cost of Revenue$332.46M
Gross Profit$984.07M
R&D Expenses$171.23M
SG&A Expenses$396.28M
Operating Expenses$811.05M
Operating Income$505.49M
Interest Expense$40.09M
Net Income$392.08M
EPS (Basic)$13.65
EPS (Diluted)$13.40
Shares Outstanding (Basic)28.73M
Shares Outstanding (Diluted)29.26M

Key Highlights

  • 1Total GAAP revenue increased by 2% to $1.32 billion in fiscal year 2021.
  • 2The Scores segment revenue grew significantly by 24% to $654.1 million, driven by increased B2B and B2C scores.
  • 3Software segment revenue decreased by 14% to $662.4 million, impacted by strategic divestitures and a shift to a platform-first strategy.
  • 4Operating income saw a substantial 71% increase to $505.5 million, aided by $100.1 million in gains from asset sales and divestitures.
  • 5Net income increased by 66% to $392.1 million.
  • 6The company repurchased approximately $882.2 million of its common stock during fiscal year 2021.
  • 7Annual Recurring Revenue (ARR) for the Software segment grew 6% (excluding divestitures) to $524.0 million as of September 30, 2021.

Frequently Asked Questions

Fair Isaac Corporation (FICO) operates through two primary segments: Scores and Software. The Scores segment includes business-to-business (B2B) and business-to-consumer (B2C) scoring solutions, most notably the widely used FICO® Score. The Software segment offers analytic and decision management solutions, including the FICO® Platform, for various business needs such as customer engagement, fraud detection, and financial crimes compliance.

In fiscal year 2021, FICO reported a 2% increase in total revenue to $1.32 billion. The Scores segment showed strong growth with a 24% revenue increase, while the Software segment saw a 14% revenue decrease due to strategic business shifts. The company reported a significant increase in operating income (71%) and net income (66%), partly due to gains from business divestitures. FICO also actively returned capital to shareholders through share repurchases totaling $882.2 million.

FICO's strategy for its Software segment is centered around a 'platform-first, cloud-delivered' approach. This involves enabling substantially all of its software products to run on the FICO® Platform, which is designed to support advanced analytics and decisioning use cases. The company is divesting non-platform-based businesses to focus investments on higher-value, strategic areas.

FICO demonstrates a commitment to enhancing shareholder value through its stock repurchase programs. In fiscal year 2021, the company spent approximately $882.2 million on repurchasing its common stock. As of September 30, 2021, the company had $173.2 million remaining under its current stock repurchase authorization.