Fair Isaac · Earnings release

FICO Announces Earnings of $5.44 per Share

for Fourth Quarter Fiscal 2024

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

BOZEMAN, Mont.--(BUSINESS WIRE)--November 6, 2024--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:

G1Revenues

G2GAAP Net Income

G3GAAP EPS

G4Non-GAAP Net Income

G5Non-GAAP EPS

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)

(In thousands)

Assets

Current assets:

Cash and cash equivalents

$

$

Accounts receivable, net

Prepaid expenses and other current assets

Total current assets

Marketable securities

Property and equipment, net

Operating lease right-of-use assets

Goodwill and intangible assets, net

Other assets

Total assets

$

$

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable and other accrued liabilities

$

$

Accrued compensation and employee benefits

Deferred revenue

Current maturities on debt

Total current liabilities

Long-term debt

Operating lease liabilities

Other liabilities

Total liabilities

Stockholders’ deficit

Total liabilities and stockholders’ deficit

$

$

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Quarter Ended September 30,

Year Ended September 30,

(In thousands, except per share data)

Revenues:

On-premises and SaaS software

$

$

$

$

Professional services

Scores

Total revenues

Operating expenses:

Cost of revenues

Research and development

Selling, general and administrative

Amortization of intangible assets

Gain on product line asset sale

—

—

—

Total operating expenses

Operating income

Other expense, net

Income before income taxes

Provision for income taxes

Net income

$

$

$

$

Earnings per share:

Basic

$

$

$

$

Diluted

$

$

$

$

Shares used in computing earnings per share:

Basic

Diluted

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Year Ended September 30,

(In thousands)

Cash flows from operating activities:

Net income

$

$

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

Depreciation and amortization

Share-based compensation

Changes in operating assets and liabilities

Gain on product line asset sale

—

Other, net

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property and equipment

Capitalized internal-use software costs

—

Net activity from marketable securities

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

—

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from revolving line of credit and term loans

Payments on revolving line of credit and term loans

Proceeds from issuance of treasury stock under employee stock plans

Taxes paid related to net share settlement of equity awards

Repurchases of common stock

Other, net

—

Net cash used in financing activities

Effect of exchange rate changes on cash

Increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

$

$

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(Unaudited)

Quarter Ended September 30,

Year Ended September 30,

(In thousands, except per share data)

GAAP net income

$

$

$

$

Amortization of intangible assets

Gain on product line asset sale

—

—

—

Share-based compensation expense

Income tax adjustments

Excess tax benefit

Adjustment to tax reserves and valuation allowance

—

—

Non-GAAP net income

$

$

$

$

GAAP diluted earnings per share

$

$

$

$

Amortization of intangible assets

—

Gain on product line asset sale

—

—

—

Share-based compensation expense

Income tax adjustments

Excess tax benefit

Adjustment to tax reserves and valuation allowance

—

—

Non-GAAP diluted earnings per share

$

$

$

$

Free cash flow

Net cash provided by operating activities

$

$

$

$

Capital expenditures

Free cash flow

$

$

$

$

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)

(In millions, except per share data)

GAAP net income

$

Share-based compensation expense

Income tax adjustments

Excess tax benefit

Non-GAAP net income

$

GAAP diluted earnings per share

$

Share-based compensation expense

Income tax adjustments

Excess tax benefit

Non-GAAP diluted earnings per share

$

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.

Contacts

Investors/Analysts:

Dave Singleton

Fair Isaac Corporation

investor@fico.com