10-QPeriod: Q2 FY2024

FAIR ISAAC CORP Quarterly Report for Q2 Ended Mar 31, 2024

Filed April 25, 2024For Securities:FICO

Summary

Fair Isaac Corporation (FICO) reported a strong third quarter for fiscal year 2024, demonstrating robust revenue growth and improved profitability. Total revenues increased by 14% year-over-year to $433.8 million, driven primarily by a significant 19% surge in the Scores segment, which reached $236.9 million. The Software segment also showed solid performance with an 8% revenue increase to $196.9 million, supported by a 15% rise in on-premises and SaaS software revenue, though professional services saw a decline as part of the company's strategic focus on higher-margin software offerings. Profitability metrics saw substantial improvement, with operating income up 22% to $194.8 million and net income rising 28% to $129.8 million. Diluted Earnings Per Share (EPS) increased by 29% to $5.16. The company also highlighted strong operational cash flow of $193.2 million for the first six months of the fiscal year. FICO continued its commitment to returning capital to shareholders, with significant share repurchases totaling $179.5 million during the quarter. The company maintains a solid financial position with $135.7 million in cash and cash equivalents and adequate liquidity to meet its obligations and fund future growth initiatives.

Financial Highlights

51 data points
Beta

Revenue

$433.81M

80.0% Gross Margin

Net Income

$129.80M

29.9% Net Margin

EPS (Diluted)

$5.16

Total Assets

$1.70B

Cash & Equivalents

$135.67M

Free Cash Flow

$66.99M

Financial Statements
Beta
Revenue$433.81M
Cost of Revenue$86.95M
Gross Profit$346.86M
R&D Expenses$40.88M
SG&A Expenses$110.87M
Operating Expenses$238.97M
Operating Income$194.84M
Interest Expense$26.09M
Net Income$129.80M
EPS (Basic)$5.23
EPS (Diluted)$5.16
Shares Outstanding (Basic)24.82M
Shares Outstanding (Diluted)25.15M

Key Highlights

  • 1Total revenue increased 14% year-over-year to $433.8 million in Q3 FY24.
  • 2Scores segment revenue grew 19% year-over-year to $236.9 million.
  • 3Software segment revenue increased 8% year-over-year to $196.9 million, with on-premises and SaaS software revenue up 15%.
  • 4Operating income rose 22% to $194.8 million, and net income increased 28% to $129.8 million.
  • 5Diluted EPS grew 29% to $5.16 per share.
  • 6Operating cash flow for the first six months of FY24 was $193.2 million, an increase from the prior year.
  • 7Share repurchases totaled $179.5 million in the quarter, demonstrating commitment to shareholder returns.

Frequently Asked Questions

The primary driver of revenue growth is the Scores segment, which saw a 19% year-over-year increase. This growth is attributed to a rise in business-to-business scores revenue due to higher unit prices, partially offset by a decrease in mortgage origination volumes. Business-to-consumer revenue saw a slight decrease.

The Software segment revenue increased by 8% year-over-year, primarily driven by a 15% increase in on-premises and SaaS software revenue. This growth is largely due to revenue recognized over time, supported by SaaS growth. Professional services revenue declined by 27%, reflecting the company's strategic decision to prioritize higher-margin software offerings.

FICO demonstrated strong profitability improvements this quarter. Operating income increased by 22% to $194.8 million, and net income rose by 28% to $129.8 million. Diluted Earnings Per Share (EPS) saw a significant 29% increase to $5.16. This indicates a positive trend in the company's ability to convert revenue into profit.

As of March 31, 2024, FICO had $135.7 million in cash and cash equivalents. The company generated $193.2 million in cash flow from operating activities for the first six months of the fiscal year, indicating strong operational cash generation. Management believes these resources, along with available credit facilities, are sufficient to fund its operations and growth for the foreseeable future.