10-QPeriod: Q2 FY2004

FAIR ISAAC CORP Quarterly Report for Q2 Ended Mar 31, 2004

Filed May 7, 2004For Securities:FICO

Summary

Fair Isaac Corporation (FICO) reported a strong first quarter for fiscal year 2004, demonstrating robust revenue growth and increased profitability. Total revenues for the quarter ended March 31, 2004, rose by 9% year-over-year to $173.2 million, driven by solid performance across all segments, particularly strong growth in Professional Services and Analytic Software Tools. Net income saw a significant 20% increase to $30.8 million, translating to diluted earnings per share of $0.42, up from $0.34 in the prior year's comparable quarter. The company also reported a substantial increase in new bookings, indicating a healthy sales pipeline for future revenue. Cash flow from operations remained strong, and the company maintained a solid liquidity position with $769.3 million in cash, cash equivalents, and marketable securities as of quarter-end. Notably, the company announced a significant subsequent event: an agreement to acquire London Bridge Software Holdings plc for approximately $299.0 million, signaling a strategic move towards expansion. Despite the positive results, investors should note the continued reliance on a few key customers and the inherent risks associated with acquisitions and evolving technology landscapes.

Key Highlights

  • 1Revenue increased 9% year-over-year to $173.2 million for the quarter ended March 31, 2004.
  • 2Net income rose 20% to $30.8 million, with diluted EPS of $0.42, up from $0.34 in the prior year.
  • 3New bookings showed significant growth, indicating strong future revenue potential.
  • 4Operating income increased by 22% year-over-year, reflecting improved profitability across segments.
  • 5The company reported strong cash flow from operations, contributing to a healthy liquidity position.
  • 6A significant subsequent event includes the announced agreement to acquire London Bridge Software Holdings plc for approximately $299.0 million.

Frequently Asked Questions

Fair Isaac Corporation provides analytic, software, and data management products and services that enable businesses to automate and improve decision-making. Their solutions are used in industries such as consumer credit, financial services, insurance, retail, telecommunications, and government for processes like customer acquisition, fraud reduction, and risk management.

For the quarter ended March 31, 2004, FICO reported a 9% increase in total revenues to $173.2 million and a 20% increase in net income to $30.8 million. Diluted earnings per share grew to $0.42 from $0.34 in the same period last year, indicating improved profitability and operational performance.

Key growth drivers include strong performance in the Professional Services and Analytic Software Tools segments, increased revenues from acquisitions made in fiscal 2003 and 2004, growth in specific solutions like consumer solutions, fraud solutions, marketing solutions, and insurance and healthcare solutions. The company also highlights the increasing importance of international revenues.

Fair Isaac announced on April 26, 2004, an agreement to acquire London Bridge Software Holdings plc for approximately $299.0 million. This acquisition is expected to close in the third fiscal quarter of 2004, subject to customary conditions.