Revenue of $382 million vs. $345 million in
prior year
FICO (NYSE:FICO), a leading predictive analytics and decision
management software company, today announced results for its first
fiscal quarter ended December 31, 2023.
First Quarter Fiscal 2024 GAAP Results
Net income for the quarter totaled $121.1 million, or $4.80 per
share, versus $97.6 million, or $3.84 per share, in the prior year
period.
Net cash provided by operating activities for the quarter was
$122.1 million versus $92.4 million in the prior year period.
First Quarter Fiscal 2024 Non-GAAP Results
Non-GAAP Net Income for the quarter was $121.2 million versus
$108.5 million in the prior year period. Non-GAAP EPS for the
quarter was $4.81 versus $4.26 in the prior year period. Free cash
flow was $120.8 million for the current quarter versus $91.6
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.
First Quarter Fiscal 2024 GAAP Revenue
The company reported revenues of $382.1 million for the quarter
as compared to $344.9 million reported in the prior year
period.
“We had a good start to our fiscal year, with another quarter of
strong growth,” said Will Lansing, chief executive officer. “We
reiterate our fiscal year 2024 guidance, which includes
double-digit percentage revenue and EPS growth.”
Revenues for the first 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 $192.1 million in the
first quarter, compared to $178.0 million in the prior year period,
an increase of 8%. B2B revenue increased 12%, primarily
attributable to a higher unit price. B2C revenue decreased 3% 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 $190.0 million in the first
quarter, compared to $166.9 million in the prior year period, an
increase of 14%, due to increased recurring revenue, partially
offset by decreases in professional services. Software Annual
Recurring Revenue was up 18% year-over-year, consisting of 43%
platform ARR growth and 11% non-platform growth. Software
Dollar-Based Net Retention Rate was 114% in the first quarter, with
platform software at 136% and non-platform software at 108%.
Outlook
The company is re-iterating its previously provided guidance for
fiscal 2024:
Fiscal 2024 Guidance
Revenues
$ 1.675 billion
GAAP Net Income
$ 490 million
GAAP EPS
$ 19.45
Non-GAAP Net Income
$ 566 million
Non-GAAP EPS
$ 22.45
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 January 25, 2024 at 5:00 p.m.
Eastern Time (2:00 p.m. Pacific Time) to report its first 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 January 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 (In thousands) (Unaudited)
December 31, September 30,
2023
2023
ASSETS: Current assets: Cash and cash equivalents
$
160,421
$
136,778
Accounts receivable, net
367,478
387,947
Prepaid expenses and other current assets
37,364
31,723
Total current assets
565,263
556,448
Marketable securities and investments
38,213
34,237
Property and equipment, net
10,406
10,966
Operating lease right-of-use-assets
18,916
25,703
Goodwill and intangible assets, net
777,837
774,244
Other assets
182,883
173,683
$
1,593,518
$
1,575,281
LIABILITIES AND STOCKHOLDERS' DEFICIT: Current
liabilities: Accounts payable and other accrued liabilities
$
65,071
$
78,487
Accrued compensation and employee benefits
68,216
102,471
Deferred revenue
146,822
136,730
Current maturities on debt
153,000
50,000
Total current liabilities
433,109
367,688
Long-term debt
1,808,655
1,811,658
Operating lease liabilities
11,899
23,903
Other liabilities
65,620
60,022
Total liabilities
2,319,283
2,263,271
Stockholders' deficit
(725,765
)
(687,990
)
$
1,593,518
$
1,575,281
FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (In thousands, except per share
data) (Unaudited) Quarter Ended
December 31,
2023
2022
Revenues: On-premises and SaaS software
$
168,668
$
144,560
Professional services
21,279
22,322
Scores
192,112
177,988
Total revenues
382,059
344,870
Operating expenses: Cost of revenues
83,461
76,569
Research & development
42,635
36,633
Selling, general and administrative
104,329
92,995
Amortization of intangible assets
275
275
Gain on product line asset sale
-
(1,941
)
Total operating expenses
230,700
204,531
Operating income
151,359
140,339
Other expense, net
(20,769
)
(22,436
)
Income before income taxes
130,590
117,903
Provision for income taxes
9,525
20,260
Net income
$
121,065
$
97,643
Basic earnings per share:
$
4.89
$
3.90
Diluted earnings per share:
$
4.80
$
3.84
Shares used in computing earnings per share: Basic
24,764
25,045
Diluted
25,219
25,443
FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands)
(Unaudited) Quarter Ended December
31,
2023
2022
Cash flows from operating activities: Net income
$
121,065
$
97,643
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
2,824
4,280
Share-based compensation
31,574
29,702
Changes in operating assets and liabilities
(30,343
)
(33,250
)
Gain on product line asset sale
-
(1,941
)
Other, net
(3,000
)
(3,994
)
Net cash provided by operating activities
122,120
92,440
Cash flows from investing activities: Purchases of
property and equipment
(1,361
)
(850
)
Net activity from marketable securities
(1,057
)
(2,165
)
Proceeds from product line asset sales, net of cash transferred
-
(7,575
)
Net cash used in investing activities
(2,418
)
(10,590
)
Cash flows from financing activities: Proceeds from
revolving line of credit and term loan
170,000
169,000
Payments on revolving line of credit and term loan
(70,750
)
(102,750
)
Proceeds from issuance of treasury stock under employee stock plans
4,499
1,995
Taxes paid related to net share settlement of equity awards
(131,911
)
(72,865
)
Repurchases of common stock
(71,704
)
(75,004
)
Net cash used in financing activities
(99,866
)
(79,624
)
Effect of exchange rate changes on cash
3,807
4,428
Increase in cash and cash equivalents
23,643
6,654
Cash and cash equivalents, beginning of period
136,778
133,202
Cash and cash equivalents, end of period
$
160,421
$
139,856
FAIR ISAAC CORPORATION NON-GAAP RESULTS (In
thousands, except per share data) (Unaudited)
Quarter Ended December 31,
2023
2022
GAAP net income
$
121,065
$
97,643
Amortization of intangible assets
275
275
Gain on product line asset sale
-
(1,941
)
Share-based compensation expense
31,574
29,702
Income tax adjustments
(7,915
)
(6,914
)
Excess tax benefit
(23,775
)
(10,304
)
Non-GAAP net income
$
121,224
$
108,461
GAAP diluted earnings per share
$
4.80
$
3.84
Amortization of intangible assets
0.01
0.01
Gain on product line asset sale
-
(0.08
)
Share-based compensation expense
1.25
1.17
Income tax adjustments
(0.31
)
(0.27
)
Excess tax benefit
(0.94
)
(0.40
)
Non-GAAP diluted earnings per share
$
4.81
$
4.26
Free cash flow Net cash provided by operating activities
$
122,120
$
92,440
Capital expenditures
(1,361
)
(850
)
Free cash flow
$
120,759
$
91,590
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 (In millions, except per share data)
(Unaudited) Fiscal 2024 Guidance GAAP
net income
$
490
Amortization of intangible assets
1
Share-based compensation expense
140
Income tax adjustments
(35
)
Excess tax benefit
(30
)
Non-GAAP net income
$
566
GAAP diluted earnings per share
$
19.45
Amortization of intangible assets
0.04
Share-based compensation expense
5.55
Income tax adjustments
(1.40
)
Excess tax benefit
(1.19
)
Non-GAAP diluted earnings per share
$
22.45
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/20240125347623/en/
Investors/Analysts:
Dave Singleton Fair Isaac Corporation (800) 459-7125
investor@fico.com
Fair Isaac (NYSE:FICO)
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