Fair Isaac Corporation

What they do

FICO operates two segments: Scores and Software. The Scores segment provides B2B predictive credit scores — most notably the FICO Score, distributed largely through the three U.S. national consumer reporting agencies (Experian, TransUnion, Equifax) — and B2C offerings including myFICO.com subscriptions. The Software segment sells pre-configured analytic and decision-management solutions and FICO Platform, available as SaaS or on-premises, for uses such as account origination, customer management, fraud detection and marketing. It serves customers in more than 80 countries, including most leading banks and credit card issuers.

Revenue drivers

• Scores - B2B — FICO Score unit fees paid by consumer reporting agencies; in Q3 FY2026 B2B revenue rose 49% year over year, primarily on a higher mortgage origination scores unit price.
• Scores - B2C — myFICO.com subscriptions and royalties from scores sold indirectly to consumers through credit reporting agencies; B2C revenue rose 5% in Q3 FY2026.
• Software — Analytics and digital decisioning technology, including FICO Platform; Q3 FY2026 revenue of $215.3M, up 2% year over year, with Software ARR of $815.8M at June 30, 2026, up 10%.

Recent performance

For the quarter ended June 30, 2026, FICO reported total revenues of $674.2 million, up 26% from $536.4 million a year earlier. Scores revenue was $458.9 million, up 41%, while Software revenue was $215.3 million, up 2%. GAAP net income was $237.2 million, or $10.45 per diluted share, versus $181.8 million, or $7.40, in the prior-year period; non-GAAP EPS was $12.18. Net cash provided by operating activities was $380.4 million for the quarter, and free cash flow was $370.3 million.

Strategy

Management is focused on running substantially all Software products on FICO Platform, a modular offering designed for advanced analytics and decisioning, to sell multiple connectable products to clients and expand their usage over time. The company reported that platform ARR grew 62% year over year as of June 30, 2026, while non-platform ARR declined 17%, reflecting that transition. FICO continues to update its scores, with FICO Score 10 and 10 T introduced in 2020 as its most recent and most predictive versions. Following the quarter, management raised its full-year fiscal 2026 guidance for revenue, GAAP net income, GAAP EPS, non-GAAP net income and non-GAAP EPS.

Risks

• Software strategy execution — FICO is concentrating development resources on moving substantially all software to FICO Platform, and the market may be unreceptive to cloud offerings or to buying multiple products, which could cause Software revenue volatility or declines.
• Concentration in few products — Scoring solutions, fraud solutions, customer communication services, customer management solutions and decision management software are expected to account for a substantial portion of total revenues, so lack of market acceptance would reduce revenues.
• Platform transition mix — As of June 30, 2026, non-platform Software ARR declined 17% year over year and non-platform dollar-based net retention was 82%, even as platform ARR grew 62%, indicating revenue can shift or erode during the transition.
• Dependence on credit reporting agencies — B2B scoring solutions are primarily distributed through major consumer reporting agencies worldwide, which pay FICO a fee per score generated and are the main channel to lenders.

Outlook

FICO raised its fiscal 2026 guidance, now expecting revenues of $2.53 billion (from $2.45 billion), GAAP net income of $850 million (from $825 million), GAAP EPS of $36.86 (from $35.60), non-GAAP net income of $979 million (from $946 million) and non-GAAP EPS of $42.43 (from $40.45). CEO Will Lansing attributed the quarter to execution of strategic priorities and said the company is pleased to raise full-year guidance. These are forward-looking figures and are subject to the risk factors described in the company's filings.