10-QPeriod: Q3 FY2026

FAIR ISAAC CORP Quarterly Report for Q3 Ended Jun 30, 2026

Filed July 29, 2026For Securities:FICO

Summary

Fair Isaac Corporation (FICO) reported strong financial results for the quarter and nine months ended June 30, 2026. Total revenues increased by 26% year-over-year for the quarter and 27% for the nine-month period, driven significantly by a 41% surge in the Scores segment, which reached $458.9 million in the quarter. The Software segment also saw a 2% revenue increase, with Annual Recurring Revenue (ARR) growing to $815.8 million, and a healthy Dollar-Based Net Retention Rate (DBNRR) of 109%. Net income and diluted Earnings Per Share (EPS) showed robust growth, up 30% and 41% respectively for the quarter. The company's operational efficiency is highlighted by improvements in operating income, which grew by 38% for the quarter, even as interest expenses increased due to higher debt levels. Significant capital allocation was directed towards share repurchases, including a substantial Accelerated Share Repurchase (ASR) program. Financially, FICO strengthened its balance sheet with increased cash on hand. However, total debt also rose significantly to $5.6 billion, largely due to new term loans and senior note issuances to fund debt repayment and share repurchases. The company's cash flow from operations also showed a healthy increase of $222.7 million for the nine months ended June 30, 2026, indicating strong underlying business performance. FICO's strategic focus on its core analytics and scoring solutions continues to drive growth, with the Scores segment showing particularly impressive momentum.

Key Highlights

  • 1Total revenues increased by 26% year-over-year to $674.2 million in Q2 2026.
  • 2Scores segment revenue surged 41% year-over-year to $458.9 million in Q2 2026.
  • 3Net income grew 30% year-over-year to $237.2 million in Q2 2026.
  • 4Diluted EPS increased 41% year-over-year to $10.45 in Q2 2026.
  • 5Software segment Annual Recurring Revenue (ARR) reached $815.8 million, up 10% year-over-year.
  • 6Cash flow from operations increased significantly to $777.9 million for the nine months ended June 30, 2026.
  • 7Total debt increased to $5.6 billion as of June 30, 2026, primarily due to new borrowings and debt issuances.

Frequently Asked Questions

The revenue increase in the Scores segment was primarily driven by a higher mortgage origination scores unit price and an increase in royalties derived from scores sold indirectly to consumers through credit reporting agencies.

FICO's total debt increased to $5.6 billion due to new term loans and senior note issuances. The company aims to manage this through strong operating cash flows, which increased to $777.9 million for the nine months ended June 30, 2026. They also have a $1.0 billion revolving line of credit available.

The Software segment showed steady growth with a 2% revenue increase. Key metrics like Annual Recurring Revenue (ARR) grew by 10% year-over-year to $815.8 million, and the Dollar-Based Net Retention Rate (DBNRR) remained strong at 109%, indicating effective customer retention and expansion.

In June 2026, FICO amended its credit agreement for a $1.5 billion term loan, which was used to fund an Accelerated Share Repurchase (ASR) agreement. Significant share repurchases, totaling $2.3 billion in the quarter and $3.1 billion in the nine months ended June 30, 2026, were undertaken, reflecting a strategy to return capital to shareholders.