10-QPeriod: Q2 FY2025

FAIR ISAAC CORP Quarterly Report for Q2 Ended Mar 31, 2025

Filed April 29, 2025For Securities:FICO

Summary

Fair Isaac Corporation (FICO) reported robust financial performance for the quarter and six months ended March 31, 2025, demonstrating significant year-over-year growth across key metrics. Total revenues increased by 15% to $498.7 million for the quarter and $938.7 million for the six-month period, driven primarily by a strong performance in the Scores segment, which saw a 25% revenue increase for the quarter and 24% for the six months. This growth was largely attributed to higher unit prices and increased royalties from scores sold indirectly to consumers. The company also maintained healthy profitability, with operating income up 26% and net income up 25% for the quarter. Diluted EPS saw a notable increase of 28% year-over-year for both periods. FICO continues to actively manage its capital, evidenced by substantial share repurchases totaling $366.8 million in the first six months of the fiscal year under its $1 billion repurchase program. Despite increased debt levels, the company maintains compliance with its financial covenants and sufficient liquidity to fund operations.

Financial Highlights

50 data points
Beta

Revenue

$498.74M

82.4% Gross Margin

Net Income

$162.62M

32.6% Net Margin

EPS (Diluted)

$6.59

Total Assets

$1.84B

Cash & Equivalents

$146.64M

Free Cash Flow

$72.80M

Financial Statements
Beta
Revenue$498.74M
Cost of Revenue$87.63M
Gross Profit$411.11M
R&D Expenses$45.04M
SG&A Expenses$120.42M
Operating Expenses$253.09M
Operating Income$245.65M
Interest Expense$31.38M
Net Income$162.62M
EPS (Basic)$6.67
EPS (Diluted)$6.59
Shares Outstanding (Basic)24.39M
Shares Outstanding (Diluted)24.68M

Key Highlights

  • 1Total revenues grew 15% year-over-year to $498.7 million for the quarter and $938.7 million for the six months ended March 31, 2025.
  • 2The Scores segment was a key driver of growth, with revenues increasing 25% for the quarter and 24% for the six months, primarily due to higher B2B scores revenue.
  • 3Operating income increased by 26% to $245.6 million for the quarter, and net income rose by 25% to $162.6 million.
  • 4Diluted Earnings Per Share (EPS) showed strong growth, up 28% to $6.59 for the quarter and $12.73 for the six months.
  • 5Software segment ARR grew 3% year-over-year to $714.6 million, and DBNRR was 102% as of March 31, 2025.
  • 6Cash flow from operations significantly increased by $75.7 million year-over-year to $268.9 million for the six-month period.
  • 7The company repurchased $366.8 million of its common stock in the first six months of the fiscal year under its $1 billion repurchase program.

Frequently Asked Questions

The primary driver of FICO's revenue growth was the Scores segment, which experienced a significant increase of 25% year-over-year for the quarter and 24% for the six-month period. This growth was largely attributed to higher unit prices for business-to-business (B2B) scores and an increase in royalties derived from scores sold indirectly to consumers through credit reporting agencies.

FICO had total debt of $2.5 billion as of March 31, 2025, an increase from $2.2 billion in the prior fiscal year-end. However, the company reported that it was in compliance with all financial covenants under its credit agreements. With $146.6 million in cash and cash equivalents and available borrowings from its $600 million revolving line of credit, FICO believes it has sufficient liquidity to fund its operations for at least the next 12 months.

The Software segment showed more modest revenue growth of 2% for the quarter and 5% for the six months, impacted by a decrease in professional services revenue. However, key subscription metrics remain healthy, with Annual Recurring Revenue (ARR) growing 3% year-over-year to $714.6 million and the Dollar-Based Net Retention Rate (DBNRR) standing at 102% as of March 31, 2025, indicating strong customer retention and expansion.

Yes, FICO has actively continued its share repurchase program. In the first six months of the fiscal year ended March 31, 2025, the company repurchased $366.8 million of its common stock under its $1 billion authorization, indicating a continued commitment to returning capital to shareholders.