• Revenue: $499 million, up 15% year-over-year.
• GAAP Net Income: $163 million, up 25% year-over-year.
• GAAP Earnings Per Share: $6.59, up 28% year-over-year.
• Non-GAAP Net Income: $193 million, up 25% year-over-year.
• Non-GAAP Earnings Per Share: $7.81, up 27% year-over-year.
• Free Cash Flow: $65 million for the quarter; $677 million over the last four quarters, up 45% year-over-year.
• Scores Segment Revenue: $297 million, up 25% year-over-year.
• B2B Revenue Growth: Up 31%, driven by mortgage originations.
• B2C Revenue Growth: Up 6%, driven by indirect channel partners.
• Software Segment Revenue: $202 million, up 2% year-over-year.
• Operating Expenses: $253 million, down 3% from the prior quarter.
• Non-GAAP Operating Margin: 58%, up 450 basis points year-over-year.
• Accounts Receivable: Increased due to timing of large payments.
• Share Repurchases: 112,000 shares at an average price of $1,849 per share.

• Warning! GuruFocus has detected 5 Warning Signs with BHE.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fair Isaac Corp (NYSE:FICO) reported a strong quarter with revenues of $499 million, up 15% from the previous year.
• GAAP net income increased by 25% to $163 million, and GAAP earnings per share rose by 28% to $6.59.
• The Scores segment saw a significant revenue increase of 25%, driven by a 31% rise in B2B revenues, particularly from mortgage originations.
• FICO continues to innovate with the introduction of the FICO Score 10 T and a Kenya-specific FICO score, enhancing financial inclusion.
• The company is expanding its partner channels, including a new partnership with Fujitsu to support digital transformation in Japanese financial institutions.

Negative Points

• The Software segment only saw a modest revenue increase of 2%, with professional services declining by 9%.
• There are macroeconomic uncertainties affecting customer conservatism, impacting growth in usage of certain services.
• Non-platform ARR declined by 3%, indicating challenges in maintaining growth in non-platform services.
• The company faces headwinds in CCS usage as some customers delay or downsize outreach programs due to macro volatility.
• Operating expenses are expected to rise in the second half of the year due to events like the FICO World Conference and other marketing activities.

Q & A Highlights

Q: Will, typically, this is your kind of beat and raise type quarter. Can you provide some perspective on how results came in versus your expectations? Are you holding the guidance due to potential uncertainty? A: Yes, we're in an environment with a bit more uncertainty than expected. We remain conservative, and there's ample time to raise guidance when we're more confident. We're comfortable with where we are. - William Lansing, CEO

Q: On the software side, you were confident in the reacceleration of software. Can you provide context on platform and non-platform performance? A: The non-platform side saw lower growth in CCS usage, reflecting customer conservatism due to macroeconomic factors. However, I remain confident that our platform growth rate will continue to be strong. - William Lansing, CEO

Q: Have you seen any changes in credit origination volumes through April, given macro uncertainty? Where do you expect to land in your guidance range if current trends persist? A: We haven't seen significant changes, but remember, we're a lagging indicator. We're comfortable with our guidance, but due to volatility, it's difficult to know what we would change it to. - William Lansing, CEO and Steven Weber, CFO

Q: Can you talk about the visibility into reacceleration in platform growth? Will it require improved macro conditions, or do you have internal drivers to boost growth? A: We have some visibility as deals are booked ahead of revenue recognition. Our optimism is tempered by the macro environment, which can delay deal closures. However, our visibility indicates a healthy business that should reaccelerate. - William Lansing, CEO

Q: Are you seeing any changes in customer approach towards platform sales cycles, such as longer cycles or changes in contract terms? A: Not so far. The platform is increasingly a strategic purchase for our customers, and while we're not immune to macro conditions, it's critical to their strategy, so it's not being deprioritized. - William Lansing, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.