FICO Announces Earnings of $5.44 per Share for Fourth Quarter Fiscal 2024

Revenue of $454 million vs. $390 million in prior year

FICO (NYSE:FICO), a global analytics software leader, today announced results for its fourth fiscal quarter ended September 30, 2024.

Fourth Quarter Fiscal 2024 GAAP Results

Net income for the quarter totaled $135.7 million, or $5.44 per share, versus $101.4 million, or $4.01 per share, in the prior year period.

Net cash provided by operating activities for the quarter was $226.5 million versus $164.0 million in the prior year period.

Fourth Quarter Fiscal 2024 Non-GAAP Results

Non-GAAP Net Income for the quarter was $163.2 million versus $126.7 million in the prior year period. Non-GAAP EPS for the quarter was $6.54 versus $5.01 in the prior year period. Free cash flow was $219.4 million for the current quarter versus $163.0 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.

Fourth Quarter Fiscal 2024 GAAP Revenue

The company reported revenues of $453.8 million for the quarter as compared to $389.7 million reported in the prior year period, an increase of 16%.

“I am very proud of our performance in FY24, another record year for FICO financially,” said Will Lansing, chief executive officer. “I am also pleased to provide our FY 2025 guidance, which includes double-digit percentage growth for all our metrics.”

Revenues for the fourth 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 $249.2 million in the fourth quarter, compared to $195.6 million in the prior year period, an increase of 27%. B2B revenue increased 38%, driven largely by higher unit prices. B2C revenue decreased 1% 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 $204.6 million in the fourth quarter, compared to $194.2 million in the prior year period, an increase of 5%, mainly due to increased recurring revenue, partially offset by a decrease in professional services. Software Annual Recurring Revenue was up 8% year-over-year, consisting of 31% platform ARR growth and no growth in non-platform. Software Dollar-Based Net Retention Rate was 106% on September 30, 2024, with platform software at 123% and non-platform software at 99%.

Outlook

The company is providing the following guidance for fiscal 2025:

Fiscal 2025 Guidance

Revenues

$1.98 billion

GAAP Net Income

$624 million

GAAP EPS

$25.05

Non-GAAP Net Income

$712 million

Non-GAAP EPS

$28.58

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 November 6, 2024, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to report its fourth 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 on our Past Events page through November 6, 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 200 U.S. 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 80 countries do everything from protecting four billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top U.S. lenders, is the standard measure of consumer credit risk in the U.S. and has been made available in over 40 other countries, improving risk management, credit access and transparency.

Learn more at https://www.fico.com/en

Join the conversation at https://x.com/FICO_corp & https://www.fico.com/blogs/

For FICO news and media resources, visit https://www.fico.com/en/newsroom

FICO is a registered trademark of Fair Isaac Corporation in the U.S. 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 impact of macroeconomic conditions on FICO’s business, operations and personnel, the success of the Company’s Decision Management strategy and reengineering initiative, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial 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 in the markets we serve. 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, 2024 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)

September 30, 2024

September 30, 2023

(In thousands)

Assets

Current assets:

Cash and cash equivalents

150,667

136,778

Accounts receivable, net

426,642

387,947

Prepaid expenses and other current assets

40,104

31,723

Total current assets

617,413

556,448

Marketable securities

45,289

33,014

Property and equipment, net

38,465

10,966

Operating lease right-of-use assets

29,580

25,703

Goodwill and intangible assets, net

782,752

774,244

Other assets

204,385

174,906

Total assets

1,717,884

1,575,281

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable and other accrued liabilities

102,285

78,487

Accrued compensation and employee benefits

106,103

102,471

Deferred revenue

156,897

136,730

Current maturities on debt

15,000

50,000

Total current liabilities

380,285

367,688

Long-term debt

2,194,021

1,811,658

Operating lease liabilities

21,963

23,903

Other liabilities

84,294

60,022

Total liabilities

2,680,563

2,263,271

Stockholders’ deficit

(962,679

)

(687,990

)

Total liabilities and stockholders’ deficit

1,717,884

1,575,281

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Quarter Ended September 30,

Year Ended September 30,

2024

2023

2024

2023

(In thousands, except per share data)

Revenues:

On-premises and SaaS software

181,707

168,979

711,340

640,182

Professional services

22,899

25,199

86,536

99,547

Scores

249,203

195,555

919,650

773,828

Total revenues

453,809

389,733

1,717,526

1,513,557

Operating expenses:

Cost of revenues

89,574

82,832

348,206

311,053

Research and development

44,208

41,596

171,940

159,950

Selling, general and administrative

122,757

99,331

462,834

400,565

Amortization of intangible assets

275

917

1,100

Gain on product line asset sale

—

(1,941

)

Total operating expenses

256,631

224,034

983,897

870,727

Operating income

197,178

165,699

733,629

642,830

Other expense, net

(25,795

)

(25,234

)

(91,604

)

(89,206

)

Income before income taxes

171,383

140,465

642,025

553,624

Provision for income taxes

35,692

39,041

129,214

124,249

Net income

135,691

101,424

512,811

429,375

Earnings per share:

Basic

5.54

4.09

20.78

17.18

Diluted

5.44

4.01

20.45

16.93

Shares used in computing earnings per share:

Basic

24,501

24,826

24,676

24,986

Diluted

24,950

25,273

25,079

25,367

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Year Ended September 30,

2024

2023

(In thousands)

Cash flows from operating activities:

Net income

512,811

429,375

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

13,827

14,638

Share-based compensation

149,439

123,847

Changes in operating assets and liabilities

(20,485

)

(63,448

)

Gain on product line asset sale

—

(1,941

)

Other, net

(22,628

)

(33,556

)

Net cash provided by operating activities

632,964

468,915

Cash flows from investing activities:

Purchases of property and equipment

(8,884

)

(4,237

)

Capitalized internal-use software costs

(16,667

)

—

Net activity from marketable securities

(2,442

)

(5,591

)

Cash transferred, net of proceeds, from product line asset sale

—

(6,126

)

Net cash used in investing activities

(27,993

)

(15,954

)

Cash flows from financing activities:

Proceeds from revolving line of credit and term loans

947,000

407,000

Payments on revolving line of credit and term loans

(602,000

)

(402,000

)

Proceeds from issuance of treasury stock under employee stock plans

25,006

22,198

Taxes paid related to net share settlement of equity awards

(139,188

)

(76,673

)

Repurchases of common stock

(821,702

)

(405,526

)

Other, net

(2,039

)

—

Net cash used in financing activities

(592,923

)

(455,001

)

Effect of exchange rate changes on cash

1,841

5,616

Increase in cash and cash equivalents

13,889

3,576

Cash and cash equivalents, beginning of year

136,778

133,202

Cash and cash equivalents, end of year

150,667

136,778

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(Unaudited)

Quarter Ended September 30,

Year Ended September 30,

2024

2023

2024

2023

(In thousands, except per share data)

GAAP net income

135,691

101,424

512,811

429,375

Amortization of intangible assets

275

917

1,100

Gain on product line asset sale

—

(1,941

)

Share-based compensation expense

39,982

34,097

149,439

123,847

Income tax adjustments

(10,134

)

(8,760

)

(38,083

)

(30,806

)

Excess tax benefit

(2,429

)

(852

)

(29,774

)

(12,586

)

Adjustment to tax reserves and valuation allowance

—

560

—

(8,940

)

Non-GAAP net income

163,202

126,744

595,310

500,049

GAAP diluted earnings per share

5.44

4.01

20.45

16.93

Amortization of intangible assets

—

0.01

0.04

Gain on product line asset sale

—

(0.08

)

Share-based compensation expense

1.60

1.35

5.96

4.88

Income tax adjustments

(0.41

)

(0.35

)

(1.52

)

(1.21

)

Excess tax benefit

(0.10

)

(0.03

)

(1.19

)

(0.50

)

Adjustment to tax reserves and valuation allowance

—

0.02

—

(0.35

)

Non-GAAP diluted earnings per share

6.54

5.01

23.74

19.71

Free cash flow

Net cash provided by operating activities

226,478

164,049

632,964

468,915

Capital expenditures

(7,123

)

(1,068

)

(25,551

)

(4,237

)

Free cash flow

219,355

162,981

607,413

464,678

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)

Fiscal 2025 Guidance

(In millions, except per share data)

GAAP net income

624

Share-based compensation expense

157

Income tax adjustments

(39

)