10-QPeriod: Q3 FY2001

FAIR ISAAC CORP Quarterly Report for Q3 Ended Jun 30, 2001

Filed August 14, 2001For Securities:FICO

Summary

Fair, Isaac and Company, Inc. (FICO) reported solid revenue growth for the nine months ended June 30, 2001, with total revenues increasing by 10% year-over-year to $242.7 million. This growth was driven primarily by the Global Data Repositories and Processors segment, which saw a 7% increase in revenue, and the 'Other' segment, which experienced a substantial 34% surge. The company also demonstrated strong operational leverage, with income from operations growing by 47% for the nine-month period, outpacing revenue growth significantly. Financially, FICO maintained a strong balance sheet, though working capital saw a slight decrease. The company significantly increased its investment portfolio, with cash and marketable investments rising to $126.5 million. FICO also continued its share repurchase program, demonstrating a commitment to returning value to shareholders. Management expressed confidence in their ability to meet future financial obligations, citing current cash reserves and expected operational cash flows.

Key Highlights

  • 1Total revenue increased by 10% for the nine months ended June 30, 2001, reaching $242.7 million.
  • 2Income from operations saw a significant increase of 47% for the nine months ended June 30, 2001, indicating strong operational leverage.
  • 3The Global Data Repositories and Processors segment and the 'Other' segment were key revenue drivers, showing 7% and 34% growth respectively for the nine months.
  • 4Cash and marketable investments significantly increased to $126.5 million as of June 30, 2001.
  • 5The company continued its stock repurchase program, buying back approximately 425,000 shares in the first half of fiscal 2001.
  • 6Effective tax rate slightly decreased due to revised state tax rates.
  • 7A Stockholder Rights Plan was adopted on August 7, 2001, to guard against abusive takeover tactics.

Frequently Asked Questions

Fair, Isaac and Company, Inc. (FICO) is a global provider of customer analytics and decision technology. The company develops, produces, markets, and distributes advanced decision-making solutions to industries such as financial services, retail, telecommunications, and insurance. Revenue is primarily generated through usage-based fees for services like credit scoring, data processing, and database management, as well as from fixed-price software and consulting services.

For the nine months ended June 30, 2001, FICO reported a 10% increase in total revenue to $242.7 million. The Global Data Repositories and Processors segment grew by 7%, and the 'Other' segment saw substantial growth of 34%. The Global Financial Services segment experienced a slight 3% increase in revenue for the nine-month period, but a 6% decrease for the three-month period.

FICO maintained a solid financial position. Working capital decreased slightly to $93.6 million from $100.7 million. However, cash and marketable investments increased significantly to $126.5 million as of June 30, 2001, driven by stock option exercises and associated tax benefits. The company's long-term liabilities are primarily related to employee benefit obligations.

FICO faces several risks, including dependence on general economic conditions and the financial services industry, unpredictability in quarterly operating results, reliance on the introduction and market acceptance of new products, risks associated with new product development, potential government regulation changes, international operational risks, challenges in recruiting and retaining qualified personnel, and the need to protect its proprietary technology rights. The company also highlighted its dependence on major contracts with credit bureaus.