Revenue of $434 million vs. $380 million in
prior year
FICO (NYSE:FICO), a leading predictive analytics and decision
management software company, today announced results for its second
fiscal quarter ended March 31, 2024.
Second Quarter Fiscal 2024 GAAP Results
Net income for the quarter totaled $129.8 million, or $5.16 per
share, versus $101.6 million, or $4.00 per share, in the prior year
period.
Net cash provided by operating activities for the quarter was
$71.0 million versus $89.8 million in the prior year period.
Second Quarter Fiscal 2024 Non-GAAP Results
Non-GAAP Net Income for the quarter was $154.5 million versus
$121.4 million in the prior year period. Non-GAAP EPS for the
quarter was $6.14 versus $4.78 in the prior year period. Free cash
flow was $61.6 million for the current quarter versus $88.3 million
in the prior year period. The Non-GAAP financial measures are
described in the financial table captioned “Non-GAAP Results” and
are reconciled to the corresponding GAAP results in the financial
tables at the end of this release.
Second Quarter Fiscal 2024 GAAP Revenue
The company reported revenues of $433.8 million for the quarter
as compared to $380.3 million reported in the prior year
period.
“We delivered a strong second quarter, posting double-digit
growth across all our guided metrics,” said Will Lansing, chief
executive officer. “We are pleased to announce that we are raising
our full year guidance.”
Revenues for the second quarter of fiscal 2024 for the company’s
two operating segments were as follows:
- Scores revenues, which include the company’s
business-to-business (B2B) scoring solutions, and
business-to-consumer (B2C) solutions, were $236.9 million in the
second quarter, compared to $198.5 million in the prior year
period, an increase of 19%. B2B revenue increased 28%, driven
largely by higher unit prices, which were partially offset by a
decrease in mortgage origination volumes. B2C revenue decreased 4%
from the prior year period due to lower volumes on myFICO.com
business.
- Software revenues, which include the company’s analytics and
digital decisioning technology, were $196.9 million in the second
quarter, compared to $181.8 million in the prior year period, an
increase of 8%, due to increased recurring revenue, partially
offset by a decrease in professional services. Software Annual
Recurring Revenue was up 14% year-over-year, consisting of 32%
platform ARR growth and 8% non-platform growth. Software
Dollar-Based Net Retention Rate was 112% at March 31, 2024, with
platform software at 126% and non-platform software at 106%.
Outlook
The company is updating its previously provided guidance for
fiscal 2024:
Previous 2024 Guidance
Updated 2024 Guidance
Revenues
$1.675 billion
$1.690 billion
GAAP Net Income
$490 million
$495 million
GAAP EPS
$19.45
$19.70
Non-GAAP Net Income
$566 million
$573 million
Non-GAAP EPS
$22.45
$22.80
The Non-GAAP financial measures are described in the financial
table captioned “Reconciliation of Non-GAAP Guidance.”
Company to Host Conference Call
The company will host a webcast on April 25, 2024 at 5:00 p.m.
Eastern Time (2:00 p.m. Pacific Time) to report its second quarter
fiscal 2024 results and provide various strategic and operational
updates. The call can be accessed at FICO's web site at
www.fico.com/investors. A replay of the webcast will be available
at our Past Events page through April 25, 2025.
About FICO
FICO (NYSE: FICO) powers decisions that help people and
businesses around the world prosper. Founded in 1956, the company
is a pioneer in the use of predictive analytics and data science to
improve operational decisions. FICO holds more than 215 US and
foreign patents on technologies that increase profitability,
customer satisfaction and growth for businesses in financial
services, insurance, telecommunications, health care, retail, and
many other industries. Using FICO solutions, businesses in more
than 100 countries do everything from protecting 2.6 billion
payment cards from fraud, to improving financial inclusion, to
increasing supply chain resiliency. The FICO® Score, used by 90% of
top US lenders, is the standard measure of consumer credit risk in
the US and has been made available in over 40 other countries,
improving risk management, credit access and transparency.
Learn more at http://www.fico.com
Join the conversation at https://twitter.com/fico &
http://www.fico.com/en/blogs/
For FICO news and media resources, visit www.fico.com/news
FICO is a registered trademark of Fair Isaac Corporation in the
US and other countries.
Statement Concerning Forward-Looking Information
Except for historical information contained herein, the
statements contained in this news release that relate to FICO or
its business are forward-looking statements within the meaning of
the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ
materially, including the success of the Company’s Software
segment’s business strategy, the Company’s ability to continue to
develop new and enhanced products and services, the maintenance of
its existing relationships and ability to create new relationships
with customers and key alliance partners, disruptions and
uncertainties with respect to global economic conditions as well as
in industries and markets of the Company and its customers, the
Company’s ability to keep up with rapidly changing technologies,
its ability to recruit and retain qualified personnel, competition,
regulatory changes applicable to the use of consumer credit and
other data, the failure to protect such data, the failure to
realize the anticipated benefits of any acquisitions, or
divestitures, and material adverse developments in global economic
conditions or the occurrence of certain other world events such as
geopolitical tensions, military conflicts, the level and volatility
of interest rates, the level of inflation, the continuing effects
of the COVID-19 pandemic, an actual recession or fears of a
recession, trade policies and tariffs, and political and
governmental instability. Additional information on these risks and
uncertainties and other factors that could affect FICO's future
results are described from time to time in FICO's SEC reports,
including its Annual Report on Form 10-K for the year ended
September 30, 2023 and its subsequent filings with the SEC. If any
of these risks or uncertainties materializes, FICO's results could
differ materially from its expectations. Investors are cautioned
not to place undue reliance on any such forward-looking statements,
which speak only as of the date they are made. FICO disclaims any
intent or obligation to update these forward-looking statements,
whether as a result of new information, future events or
otherwise.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
March 31, 2024
September 30, 2023
(In thousands)
Assets
Current assets:
Cash and cash equivalents
$
135,667
$
136,778
Accounts receivable, net
469,025
387,947
Prepaid expenses and other current
assets
36,780
31,723
Total current assets
641,472
556,448
Marketable securities and investments
42,659
34,237
Property and equipment, net
27,224
10,966
Operating lease right-of-use assets
28,283
25,703
Goodwill and intangible assets, net
776,743
774,244
Other assets
186,736
173,683
Total assets
$
1,703,117
$
1,575,281
Liabilities and Stockholders’
Deficit
Current liabilities:
Accounts payable and other accrued
liabilities
$
87,771
$
78,487
Accrued compensation and employee
benefits
68,805
102,471
Deferred revenue
143,544
136,730
Current maturities on debt
15,000
50,000
Total current liabilities
315,120
367,688
Long-term debt
2,028,652
1,811,658
Operating lease liabilities
20,558
23,903
Other liabilities
74,447
60,022
Total liabilities
2,438,777
2,263,271
Stockholders’ deficit
(735,660
)
(687,990
)
Total liabilities and stockholders’
deficit
$
1,703,117
$
1,575,281
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
Quarter Ended March
31,
Six Months Ended March
31,
2024
2023
2024
2023
(In thousands, except per
share data)
Revenues:
On-premises and SaaS software
$
177,180
$
154,584
$
345,848
$
299,144
Professional services
19,744
27,175
41,023
49,497
Scores
236,885
198,507
428,997
376,495
Total revenues
433,809
380,266
815,868
725,136
Operating expenses:
Cost of revenues
86,946
79,806
170,407
156,375
Research and development
40,880
40,266
83,515
76,899
Selling, general and administrative
110,867
100,158
215,196
193,153
Amortization of intangible assets
275
275
550
550
Gain on product line asset sale
—
—
—
(1,941
)
Total operating expenses
238,968
220,505
469,668
425,036
Operating income
194,841
159,761
346,200
300,100
Other expense, net
(22,107
)
(22,292
)
(42,876
)
(44,728
)
Income before income taxes
172,734
137,469
303,324
255,372
Provision for income taxes
42,935
35,919
52,460
56,179
Net income
$
129,799
$
101,550
$
250,864
$
199,193
Earnings per share:
Basic
$
5.23
$
4.04
$
10.12
$
7.94
Diluted
$
5.16
$
4.00
$
9.96
$
7.83
Shares used in computing earnings per
share:
Basic
24,819
25,116
24,791
25,080
Diluted
25,154
25,419
25,186
25,431
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended March
31,
2024
2023
(In thousands)
Cash flows from operating
activities:
Net income
$
250,864
$
199,193
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
6,178
8,294
Share-based compensation
67,022
56,755
Changes in operating assets and
liabilities
(119,159
)
(68,391
)
Gain on product line asset sale
—
(1,941
)
Other, net
(11,750
)
(11,666
)
Net cash provided by operating
activities
193,155
182,244
Cash flows from investing
activities:
Purchases of property and equipment
(5,403
)
(2,377
)
Capitalized internal-use software
costs
(5,380
)
—
Net activity from marketable
securities
(1,257
)
(3,384
)
Cash transferred, net of proceeds, from
product line asset sale
—
(6,126
)
Net cash used in investing activities
(12,040
)
(11,887
)
Cash flows from financing
activities:
Proceeds from revolving line of credit and
term loan
255,000
228,000
Payments on revolving line of credit and
term loan
(74,500
)
(158,500
)
Proceeds from issuance of treasury stock
under employee stock plans
14,937
15,217
Taxes paid related to net share settlement
of equity awards
(133,786
)
(73,672
)
Repurchases of common stock
(243,473
)
(184,290
)
Other, net
(1,400
)
—
Net cash used in financing activities
(183,222
)
(173,245
)
Effect of exchange rate changes on
cash
996
7,457
Increase (decrease) in cash and cash
equivalents
(1,111
)
4,569
Cash and cash equivalents, beginning of
period
136,778
133,202
Cash and cash equivalents, end of
period
$
135,667
$
137,771
FAIR ISAAC CORPORATION
NON-GAAP RESULTS
(Unaudited)
Quarter Ended March
31,
Six Months Ended March
31,
2024
2023
2024
2023
(In thousands, except per
share data)
GAAP net income
$
129,799
$
101,550
$
250,864
$
199,193
Amortization of intangible assets
275
275
550
550
Gain on product line asset sale
—
—
—
(1,941
)
Share-based compensation expense
35,448
27,053
67,022
56,755
Income tax adjustments
(9,096
)
(6,818
)
(17,011
)
(13,732
)
Excess tax benefit
(1,934
)
(612
)
(25,709
)
(10,916
)
Non-GAAP net income
$
154,492
$
121,448
$
275,716
$
229,909
GAAP diluted earnings per share
$
5.16
$
4.00
$
9.96
$
7.83
Amortization of intangible assets
0.01
0.01
0.02
0.02
Gain on product line asset sale
—
—
—
(0.08
)
Share-based compensation expense
1.41
1.06
2.66
2.23
Income tax adjustments
(0.36
)
(0.27
)
(0.68
)
(0.54
)
Excess tax benefit
(0.08
)
(0.02
)
(1.02
)
(0.43
)
Non-GAAP diluted earnings per share
$
6.14
$
4.78
$
10.95
$
9.04
Free cash flow
Net cash provided by operating
activities
$
71,035
$
89,803
$
193,155
$
182,244
Capital expenditures
(9,422
)
(1,526
)
(10,783
)
(2,377
)
Free cash flow
$
61,613
$
88,277
$
182,372
$
179,867
Note: The numbers may not sum to total due
to rounding.
About Non-GAAP Financial Measures
To supplement the consolidated GAAP financial statements, the
company uses the following non-GAAP financial measures: non-GAAP
net income, non-GAAP EPS, and free cash flow. Non-GAAP net income
and non-GAAP EPS exclude, to the extent applicable, such items as
the impact of amortization expense, share-based compensation
expense, restructuring and acquisition-related, excess tax benefit,
and adjustment to tax valuation allowance items. Free cash flow
excludes capital expenditures. The presentation of these financial
measures is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP.
Management uses these non-GAAP financial measures for financial
and operational decision-making and as a means to evaluate
period-to-period comparisons. Our management believes these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance and liquidity by excluding
certain items that may not be indicative of recurring business
results including significant non-cash expenses. We believe
management and investors benefit from referring to these non-GAAP
financial measures in assessing our performance when planning,
forecasting and analyzing future periods. These non-GAAP financial
measures also facilitate management’s internal comparisons to
historical performance and liquidity as well as comparisons to our
competitors’ operating results. We believe these non-GAAP financial
measures are useful to investors because they allow for greater
transparency with respect to key measures used by management in its
financial and operating decision-making.
FAIR ISAAC CORPORATION
RECONCILIATION OF NON-GAAP
GUIDANCE
(Unaudited)
Previous Fiscal 2024
Guidance
Updated Fiscal 2024
Guidance
(In millions, except per share
data)
GAAP net income
$
490
$
495
Amortization of intangible assets
1
1
Share-based compensation expense
140
140
Income tax adjustments
(35
)
(35
)
Excess tax benefit
(30
)
(28
)
Non-GAAP net income
$
566
$
573
GAAP diluted earnings per share
$
19.45
$
19.70
Amortization of intangible assets
0.04
0.04
Share-based compensation expense
5.55
5.57
Income tax adjustments
(1.40
)
(1.39
)
Excess tax benefit
(1.19
)
(1.11
)
Non-GAAP diluted earnings per share
$
22.45
$
22.80
Note: The numbers may not sum to total due to rounding.
About Non-GAAP Financial Measures
To supplement the consolidated GAAP financial statements, the
company uses the following non-GAAP financial measures: non-GAAP
net income, non-GAAP EPS, and free cash flow. Non-GAAP net income
and non-GAAP EPS exclude, to the extent applicable, such items as
the impact of amortization expense, share-based compensation
expense, restructuring and acquisition-related, excess tax benefit,
and adjustment to tax valuation allowance items. Free cash flow
excludes capital expenditures. The presentation of these financial
measures is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP.
Management uses these non-GAAP financial measures for financial
and operational decision-making and as a means to evaluate
period-to-period comparisons. Our management believes these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance and liquidity by excluding
certain items that may not be indicative of recurring business
results including significant non-cash expenses. We believe
management and investors benefit from referring to these non-GAAP
financial measures in assessing our performance when planning,
forecasting and analyzing future periods. These non-GAAP financial
measures also facilitate management’s internal comparisons to
historical performance and liquidity as well as comparisons to our
competitors’ operating results. We believe these non-GAAP financial
measures are useful to investors because they allow for greater
transparency with respect to key measures used by management in its
financial and operating decision-making.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425737168/en/
Investors/Analysts: Dave Singleton Fair Isaac Corporation
(800) 459-7125 investor@fico.com
Fair Isaac (NYSE:FICO)
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