SAN JOSE, Calif., May 5, 2021 /PRNewswire/ -- FICO (NYSE:
FICO), a leading predictive analytics and decision management
software company, today announced results for its second fiscal
quarter ended March 31, 2021.
Second Quarter Fiscal 2021 GAAP Results
Net income for
the quarter totaled $68.7 million, or
$2.33 per share, versus $58.3 million, or $1.94 per share, in the prior year period.
Net cash provided by operating activities for the quarter was
$153.5 million versus $61.5 million in the prior year period.
Second Quarter Fiscal 2021 Non-GAAP Results
Non-GAAP
Net Income for the quarter was $90.2
million versus $64.3 million in the prior year period.
Non-GAAP EPS for the quarter was $3.06 versus $2.14 in the prior year
period. Free cash flow for the quarter was $152.3 million versus $54.8 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 2021 GAAP Revenue
The company
reported revenues of $331.4 million
for the quarter as compared to $308.0
million reported in the prior year period.
"We had another great quarter, delivering strong revenues and
record cash flows," said Will
Lansing, chief executive officer. "And we are achieving this
as we reduce our reliance on up-front license revenue."
Revenues for the second quarter of fiscal 2021 across each of
the company's three operating segments were as follows:
- Applications revenues, which include the company's
decision management applications and associated professional
services, were $129.5 million in the
second quarter, compared to $140.3
million in the prior year period, a decrease of 8%, due
primarily to decreased services and up-front license revenues.
- Scores revenues, which include the company's
business-to-business (B2B) scoring solutions and associated
professional services, and business-to-consumer (B2C) service, were
$168.7 million in the second quarter,
compared to $129.1 million in the
prior year period, an increase of 31%. B2B revenue increased 25%,
driven largely by unit price increases and higher origination
volumes. B2C revenue increased 47% from the prior year period due
to higher volumes at myFICO.com, as well as through our
partners.
- Decision Management Software revenues, which include
Blaze Advisor®, Xpress Optimization, Decision Management
Platform and related professional services, were $33.2 million in the second quarter compared to
$38.5 million in the prior year
period, a decrease of 14%, due primarily to decreased up-front
license and services revenues.
Company to Divest Debt Collection and Recovery
Business
The company also announced today the signing of a
definitive agreement to sell its Debt Collection and Recovery
products to Constellation's Jonas Software operating
group, a leading provider of enterprise management software
solutions. Completion of the acquisition remains subject to
mutually agreed closing conditions. FICO Debt Collection and
Recovery products represent less than 10 percent of total company
revenues. FICO expects the divestiture to have an immaterial impact
on future operating profits. FICO intends to include the sale
proceeds in a $200 million
Accelerated Share Repurchase program following the close of the
transaction.
Company to Host Conference Call
The company will host
a webcast today at 5:00 p.m. Eastern
Time (2:00 p.m. Pacific Time)
to report its second quarter fiscal 2021 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
May 5, 2022.
About FICO
FICO (NYSE: FICO) powers decisions that
help people and businesses around the world prosper. Founded in
1956 and based in Silicon Valley, the company is a pioneer in the
use of predictive analytics and data science to improve operational
decisions. FICO holds more than 165 US and foreign patents on
technologies that increase profitability, customer satisfaction and
growth for businesses in financial services, 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 helping people
get credit, to ensuring that millions of airplanes and rental cars
are in the right place at the right time.
Learn more at http://www.fico.com
Join the conversation at https://twitter.com/fico &
http://www.fico.com/en/blogs/
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 impact of COVID-19 on
macroeconomic conditions and 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, 2020 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
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
2021
|
|
2020
|
ASSETS:
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
197,836
|
|
$
157,394
|
Accounts receivable,
net
|
264,804
|
|
334,180
|
Prepaid expenses and other
current assets
|
40,335
|
|
42,504
|
Assets held for
sale
|
48,843
|
|
-
|
Total current assets
|
551,818
|
|
534,078
|
|
|
|
|
Marketable securities
and investments
|
31,777
|
|
26,573
|
Property and
equipment, net
|
34,897
|
|
46,419
|
Operating lease
right-of-use-assets
|
50,986
|
|
57,656
|
Goodwill and
intangible assets, net
|
796,560
|
|
821,600
|
Other
assets
|
113,570
|
|
119,914
|
|
$
1,579,608
|
|
$
1,606,240
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY:
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and other
accrued liabilities
|
$
79,829
|
|
$
86,400
|
Accrued compensation and
employee benefits
|
71,347
|
|
117,952
|
Deferred revenue
|
100,396
|
|
115,159
|
Current maturities on
debt
|
225,000
|
|
95,000
|
Liabilities related to
assets held for sale
|
23,989
|
|
-
|
Total current liabilities
|
500,561
|
|
414,511
|
|
|
|
|
Long-term
debt
|
740,226
|
|
739,435
|
Operating lease
liabilities
|
59,100
|
|
73,207
|
Other
liabilities
|
56,418
|
|
48,005
|
Total liabilities
|
1,356,305
|
|
1,275,158
|
|
|
|
|
Stockholders'
equity
|
223,303
|
|
331,082
|
|
$
1,579,608
|
|
$
1,606,240
|
FAIR ISAAC
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
$
280,919
|
|
$
240,702
|
|
$
533,069
|
|
$
461,076
|
Professional
services
|
37,794
|
|
47,905
|
|
79,219
|
|
91,930
|
License
|
12,648
|
|
19,364
|
|
31,487
|
|
53,469
|
Total
revenues
|
331,361
|
|
307,971
|
|
643,775
|
|
606,475
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of revenues
|
88,333
|
|
88,139
|
|
177,861
|
|
178,897
|
Research &
development
|
43,612
|
|
39,439
|
|
84,263
|
|
78,382
|
Selling, general and
administrative
|
97,272
|
|
103,465
|
|
191,183
|
|
215,486
|
Amortization of intangible
assets
|
945
|
|
1,202
|
|
1,882
|
|
2,998
|
Restructuring and impairment
charges
|
-
|
|
-
|
|
-
|
|
3,104
|
Gain on sale of product line
assets
|
-
|
|
-
|
|
(7,334)
|
|
-
|
Total
operating expenses
|
230,162
|
|
232,245
|
|
447,855
|
|
478,867
|
Operating
income
|
101,199
|
|
75,726
|
|
195,920
|
|
127,608
|
Other expense,
net
|
(9,375)
|
|
(13,262)
|
|
(16,136)
|
|
(23,249)
|
Income before income
taxes
|
91,824
|
|
62,464
|
|
179,784
|
|
104,359
|
Income taxe provision
(benefit)
|
23,150
|
|
4,176
|
|
24,618
|
|
(8,850)
|
Net income
|
$
68,674
|
|
$
58,288
|
|
$
155,166
|
|
$
113,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
$
2.36
|
|
$
2.00
|
|
$
5.33
|
|
$
3.89
|
Diluted earnings per
share:
|
$
2.33
|
|
$
1.94
|
|
$
5.23
|
|
$
3.76
|
|
|
|
|
|
|
|
|
Shares used in
computing earnings per share:
|
|
|
|
|
|
|
|
Basic
|
29,087
|
|
29,194
|
|
29,107
|
|
29,109
|
Diluted
|
29,531
|
|
29,985
|
|
29,660
|
|
30,076
|
FAIR ISAAC
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
March
31,
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
Net
income
|
$
155,166
|
|
$
113,209
|
Adjustments to
reconcile net income to net cash provided by
|
|
|
|
operating activities:
|
|
|
|
Depreciation and
amortization
|
13,701
|
|
15,535
|
Share-based
compensation
|
53,338
|
|
45,933
|
Changes in
operating assets and liabilities
|
11,188
|
|
(66,649)
|
Other,
net
|
(1,923)
|
|
13,831
|
Net cash provided by operating activities
|
231,470
|
|
121,859
|
|
|
|
|
Cash flows
from investing activities:
|
|
|
|
Purchases of
property and equipment
|
(4,220)
|
|
(13,166)
|
Net activity
from marketable securities
|
(2,115)
|
|
(1,847)
|
Other,
net
|
8,081
|
|
55
|
Net cash provided by (used in) investing
activities
|
1,746
|
|
(14,958)
|
|
|
|
|
Cash flows
from financing activities:
|
|
|
|
Proceeds from
revolving line of credit
|
251,000
|
|
156,000
|
Payments on
revolving line of credit
|
(121,000)
|
|
(377,000)
|
Proceeds from
issuance of senior notes
|
-
|
|
350,000
|
Proceeds from
issuances of common stock
|
10,390
|
|
23,216
|
Taxes paid
related to net share settlement of equity awards
|
(86,653)
|
|
(97,000)
|
Repurchases of
common stock
|
(250,356)
|
|
(148,008)
|
Other,
net
|
(176)
|
|
(7,552)
|
Net cash used in financing activities
|
(196,795)
|
|
(100,344)
|
|
|
|
|
Effect of
exchange rate changes on cash
|
4,021
|
|
(4,017)
|
|
|
|
|
Increase in
cash and cash equivalents
|
40,442
|
|
2,540
|
Cash and cash
equivalents, beginning of period
|
157,394
|
|
106,426
|
Cash and cash
equivalents, end of period
|
$
197,836
|
|
$
108,966
|
FAIR ISAAC
CORPORATION
|
REVENUE BY
SEGMENT
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2021
|
|
2020
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Applications
revenues:
|
|
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
|
$
96,687
|
|
$
97,789
|
|
|
$
194,418
|
|
$
196,626
|
Professional
services
|
|
27,627
|
|
35,134
|
|
|
58,232
|
|
69,157
|
License
|
|
5,200
|
|
7,356
|
|
|
12,225
|
|
26,674
|
Total applications revenues
|
|
$
129,514
|
|
$
140,279
|
|
|
$
264,875
|
|
$
292,457
|
|
|
|
|
|
|
|
|
|
|
Scores
revenues:
|
|
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
|
$
167,212
|
|
$
127,610
|
|
|
$
305,802
|
|
$
235,056
|
Professional
services
|
|
703
|
|
819
|
|
|
820
|
|
1,083
|
License
|
|
804
|
|
719
|
|
|
6,748
|
|
8,147
|
Total scores revenues
|
|
$
168,719
|
|
$
129,148
|
|
|
$
313,370
|
|
$
244,286
|
|
|
|
|
|
|
|
|
|
|
Decision Management
Software revenues:
|
|
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
|
$
17,020
|
|
$
15,303
|
|
|
$
32,849
|
|
$
29,394
|
Professional
services
|
|
9,464
|
|
11,952
|
|
|
20,167
|
|
21,690
|
License
|
|
6,644
|
|
11,289
|
|
|
12,514
|
|
18,648
|
Total decision management software revenues
|
$
33,128
|
|
$
38,544
|
|
|
$
65,530
|
|
$
69,732
|
|
|
|
|
|
|
|
|
|
|
Total
revenues:
|
|
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
|
$
280,919
|
|
$
240,702
|
|
|
$
533,069
|
|
$
461,076
|
Professional
services
|
|
37,794
|
|
47,905
|
|
|
79,219
|
|
91,930
|
License
|
|
12,648
|
|
19,364
|
|
|
31,487
|
|
53,469
|
Total revenues
|
|
$
331,361
|
|
$
307,971
|
|
|
$
643,775
|
|
$
606,475
|
FAIR ISAAC
CORPORATION
|
NON-GAAP
RESULTS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
68,674
|
|
$
58,288
|
|
$
155,166
|
|
$
113,209
|
Amortization of
intangible assets
|
945
|
|
1,202
|
|
1,882
|
|
2,998
|
Restructuring and
acquisition-related
|
-
|
|
-
|
|
-
|
|
3,104
|
Gain on sale of
product line assets
|
-
|
|
-
|
|
(7,334)
|
|
-
|
Stock-based
compensation expense
|
28,206
|
|
22,788
|
|
53,338
|
|
45,933
|
Income tax
adjustments
|
(7,271)
|
|
(6,045)
|
|
(11,757)
|
|
(12,807)
|
Excess tax
benefit
|
(329)
|
|
(11,925)
|
|
(19,512)
|
|
(33,943)
|
Non-GAAP net
income
|
$
90,225
|
|
$
64,308
|
|
$
171,783
|
|
$
118,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
$
2.33
|
|
$
1.94
|
|
$
5.23
|
|
$
3.76
|
Amortization of
intangible assets
|
0.03
|
|
0.04
|
|
0.06
|
|
0.10
|
Restructuring and
acquisition-related
|
-
|
|
-
|
|
-
|
|
0.10
|
Gain on sale of
product line assets
|
-
|
|
-
|
|
(0.25)
|
|
-
|
Stock-based
compensation expense
|
0.96
|
|
0.76
|
|
1.80
|
|
1.53
|
Income tax
adjustments
|
(0.25)
|
|
(0.20)
|
|
(0.40)
|
|
(0.43)
|
Excess tax
benefit
|
(0.01)
|
|
(0.40)
|
|
(0.66)
|
|
(1.13)
|
Non-GAAP diluted
earnings per share
|
$
3.06
|
|
$
2.14
|
|
$
5.79
|
|
$
3.94
|
|
|
|
|
|
|
|
|
Free cash
flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
153,523
|
|
$
61,494
|
|
$
231,470
|
|
$
121,859
|
Capital
expenditures
|
(1,175)
|
|
(6,667)
|
|
(4,220)
|
|
(13,167)
|
Free cash
flow
|
$
152,348
|
|
$
54,827
|
|
$
227,250
|
|
$
108,692
|
|
|
|
|
|
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Note: The numbers may
not sum to total due to rounding.
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About Non-GAAP
Financial Measures
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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 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 and
dividends paid. 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.
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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.
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SOURCE FICO