Core Viewpoint - Fair Isaac's stock experienced a significant decline, dropping nearly 16% in one trading session, which is substantially higher than the S&P 500's 1.6% decline, indicating a severe negative market reaction to recent criticisms of the company [1][2]. Group 1: Company Performance - Fair Isaac's stock fell by almost 16% on Wednesday, marking a continuation of its downward trend after an 8% drop on Tuesday [1][2]. - The company's stock performance is being closely tied to external criticisms, particularly from Bill Pulte, director of the Federal Housing Finance Agency, who has publicly criticized Fair Isaac's pricing practices [2][4]. Group 2: Regulatory Environment - Bill Pulte's comments suggest a potential shift in regulatory scrutiny towards Fair Isaac and the broader credit reporting industry, with implications for how these companies interact with mortgage providers [4]. - Pulte's remarks indicate a concern over rising costs for consumers associated with credit reports, which could lead to regulatory changes that may negatively impact Fair Isaac's business volume [4][6]. Group 3: Market Sentiment - The market's reaction to Fair Isaac's stock decline reflects investor sentiment that is wary of potential regulatory changes and their impact on the company's profitability [1][5]. - The current administration's approach to policy may create uncertainty for Fair Isaac, as there is a history of rhetoric not translating into immediate policy changes [5][6].

Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or ...

Market Capitalization Changes - Tesla's market capitalization increased by 6.75% to $1,025.4 billion [3] - TSMC's market capitalization rose by 5.93% to $969.7 billion [3] - Tencent's market capitalization grew by 4.66% to $609.8 billion [3] - Netflix's market capitalization decreased by 2.65% to $472.3 billion [3] - Oracle's market capitalization increased by 4.58% to $440.8 billion [3] Notable Performers - Shopify saw a significant increase of 13.7% in market capitalization, reaching $136.2 billion [4] - AppLovin experienced a remarkable rise of 89% to $1.177 billion [4] - AMD's market capitalization increased by 5.13% to $175.3 billion [5] - Uber's market capitalization rose by 6.39% to $184.2 billion [5] Decliners - Pinduoduo's market capitalization fell by 6.14% to $165.2 billion [4] - Xiaomi's market capitalization decreased by 2.11% to $163.4 billion [4] - Spotify's market capitalization declined by 4.23% to $127.3 billion [4] Other Companies of Interest - Adobe's market capitalization increased by 3.3% to $168.7 billion [4] - Qualcomm's market capitalization rose by 4.78% to $167.0 billion [4] - Intel's market capitalization increased by 3.55% to $96.7 billion [5] - Airbnb's market capitalization grew by 5.64% to $828 million [5]

Core Insights - Fair Isaac (FICO) reported second-quarter fiscal 2025 earnings of $7.81 per share, exceeding the Zacks Consensus Estimate by 5.68% and showing a year-over-year increase of 27.2% [1] - Revenues reached $498.7 million, surpassing the consensus mark by 0.51% and increasing 15% year over year, with contributions from the Americas (86%), EMEA (9%), and Asia Pacific (5%) [1] Financial Performance - Software revenues rose 2.4% year over year to $201.7 million, driven by higher license revenue [3] - Software Annual Recurring Revenues (ARR) grew 3% year over year, with platform ARR increasing by 17% and non-platform declining by 3% [4] - Scores revenues increased 25.4% year over year to $297 million, with B2B revenues up 31% and B2C revenues up 6% [5] - Mortgage originations revenues surged 48% year over year, accounting for 54% of B2B revenues and 44% of total scores revenues [6] Operating Metrics - Research and development expenses as a percentage of revenues decreased by 40 basis points to 9% [8] - Selling, general and administrative expenses as a percentage of revenues fell by 140 basis points to 24.1% [8] - Adjusted EBITDA increased 21.6% year over year to $287.8 million, with an adjusted EBITDA margin of 57.7% [8] Balance Sheet and Cash Flow - As of March 31, 2025, FICO had $146.6 million in cash and cash equivalents and total debt of $2.5 billion, compared to $184.3 million in cash and $2.4 billion in debt as of December 31, 2024 [11] - Cash flow from operations was $74.9 million, down from $194 million in the previous quarter, with free cash flow at $65.5 million compared to $186.8 million in the prior quarter [11] Guidance - For fiscal 2025, FICO anticipates revenues of $1.98 billion and non-GAAP earnings projected at $28.58 per share [13]

Financial Data and Key Metrics Changes - The company reported Q2 revenues of $499 million, an increase of 15% year-over-year [5][15] - GAAP net income for the quarter was $163 million, up 25% from the prior year, with GAAP earnings per share at $6.59, a 28% increase [6][20] - Non-GAAP net income was $193 million, also up 25%, with non-GAAP earnings per share at $7.81, a 27% increase [6][20] - Free cash flow for the quarter was $65 million, a 6% increase year-over-year, with total free cash flow over the last four quarters at $677 million, up 45% [6][21] Business Line Data and Key Metrics Changes - In the Scores segment, revenues were $297 million, up 25% year-over-year, with B2B revenues increasing by 31% primarily due to mortgage originations [7][15] - B2C revenues grew by 6%, driven by indirect channel partners [7][15] - Mortgage origination revenues surged by 48%, accounting for 54% of B2B revenue and 44% of total Scores revenue [7][8] - The Software segment reported revenues of $202 million, a 2% increase from the prior year, with on-premises and SaaS software revenue growing by 4% [11][15] Market Data and Key Metrics Changes - The Americas region contributed 86% of total company revenues, while EMEA and Asia Pacific regions generated 9% and 5% respectively [16] - Total software ARR was $715 million, a 3% increase year-over-year, with platform ARR growing by 17% [12][17] - The dollar-based net retention rate was 102%, with platform NRR at 110% and non-platform at 96% [12][18] Company Strategy and Development Direction - The company continues to focus on innovation, with new products like the FICO Score mortgage simulator and FICO Score 10T being highlighted [9][10] - Partnerships with companies like Fujitsu and Dakado aim to enhance digital transformation and precision in the life insurance industry [13] - The company is committed to expanding its indirect sales channels and enhancing its partner network [11][112] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fiscal year guidance despite macroeconomic uncertainties [22] - The company noted that while there are headwinds in customer outreach programs, the overall business remains healthy [34][41] - Management emphasized the importance of customer education in maximizing the value of their offerings [115] Other Important Information - The company repurchased 112,000 shares in Q2 at an average price of $18.49 per share [22] - The effective tax rate for the quarter was 23.7%, with expectations of around 22% for the full year [20] Q&A Session Summary Question: How did results compare to expectations? - Management acknowledged the current environment's uncertainty and maintained a conservative approach to guidance [31] Question: What is the outlook for software reacceleration? - Management indicated that macroeconomic factors are influencing growth, but they remain optimistic about platform growth [32][34] Question: Any changes in credit origination volumes? - Management noted no significant changes in credit origination volumes but acknowledged the lag in data reporting [38][40] Question: Are there changes in customer behavior regarding platform sales cycles? - Management reported no significant changes in sales cycles, indicating that the platform remains a strategic purchase for customers [45][46] Question: What is the outlook for professional services revenue? - Management expects professional services revenue to increase in the second half of the year due to timing issues [117] Question: What are the strategic priorities moving forward? - Management highlighted upcoming innovations and the use of AI, with announcements expected at FICO World [121]

Financial Performance - Total revenue for Q2 2025 was $498.7 million, a 13% increase quarter-over-quarter (Q/Q) and a 15% increase year-over-year (Y/Y) [3] - Scores revenue reached $297.0 million in Q2 2025, showing a 26% increase Q/Q and a 25% increase Y/Y [3] - Software revenue was $201.7 million in Q2 2025, a 1% decrease Q/Q but a 2% increase Y/Y [3] - Adjusted EBITDA for Q2 2025 was $287.8 million, a 29% increase Q/Q and a 22% increase Y/Y [3] - Non-GAAP diluted EPS was $7.81 in Q2 2025, a 35% increase Q/Q and a 27% increase Y/Y [3] Software Metrics - Software ARR (Annual Recurring Revenue) was $714.6 million, a 2% decrease Q/Q but a 3% increase Y/Y [3] - Software ACV (Annual Contract Value) Bookings were $21.8 million, a 3% increase Q/Q and a 30% increase Y/Y [3] - Platform ARR reached $234.7 million by March 31, 2025, representing 33% of the total ARR [17] - Non-Platform ARR reached $479.9 million by March 31, 2025, representing 67% of the total ARR [17] Scores Segment Highlights - Total Scores revenues increased by 25% compared to Q2 2024 [15] - B2B revenue increased by 31% compared to Q2 2024 [15] - Mortgage Originations revenues increased by 48% compared to Q2 2024 [15]

Core Insights - Fair Isaac (FICO) reported revenue of $498.74 million for the quarter ended March 2025, marking a year-over-year increase of 15% and an EPS of $7.81 compared to $6.14 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1][2] Financial Performance - The reported revenue of $498.74 million surpassed the Zacks Consensus Estimate of $496.22 million, resulting in a surprise of +0.51% [1] - The EPS of $7.81 exceeded the consensus estimate of $7.39, delivering a surprise of +5.68% [1] - Annual Recurring Revenue (ARR) for the platform was $234.70 million, below the average estimate of $248.73 million [4] - Total ARR was reported at $714.60 million, compared to the estimated $751.38 million [4] - Non-platform ARR was $479.90 million, lower than the average estimate of $502.65 million [4] Revenue Breakdown - Professional services revenue was $17.87 million, below the average estimate of $19.18 million, reflecting a year-over-year decline of -9.5% [4] - Software revenue reached $201.70 million, slightly below the average estimate of $211.53 million, with a year-over-year increase of +2.4% [4] - Scores revenue was $297.04 million, exceeding the average estimate of $286 million, with a year-over-year increase of +25.4% [4] - On-premises and SaaS software revenue was $183.83 million, below the average estimate of $192.35 million, with a year-over-year increase of +3.8% [4] - Business-to-consumer scores revenue was $54.55 million, surpassing the average estimate of $52.90 million, with a year-over-year increase of +6.2% [4] - Business-to-business scores revenue was $242.49 million, exceeding the average estimate of $235.89 million, with a year-over-year increase of +30.7% [4] Operating Income - Operating income for software was reported at $63.32 million, below the average estimate of $69.19 million [4] - Operating income for scores was $264.97 million, exceeding the average estimate of $254.48 million [4] Stock Performance - Fair Isaac's shares returned +5.4% over the past month, while the Zacks S&P 500 composite experienced a -0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Fair Isaac (FICO) reported quarterly earnings of $7.81 per share, exceeding the Zacks Consensus Estimate of $7.39 per share, and up from $6.14 per share a year ago, representing an earnings surprise of 5.68% [1] - The company posted revenues of $498.74 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.51%, and an increase from $433.81 million year-over-year [2] - Fair Isaac has surpassed consensus EPS estimates only once in the last four quarters, indicating mixed performance in earnings expectations [2][6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $7.80 on revenues of $518.78 million, and for the current fiscal year, it is $29.16 on revenues of $1.99 billion [7] - The estimate revisions trend for Fair Isaac is currently mixed, leading to a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Computers - IT Services industry, to which Fair Isaac belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, which may impact the stock's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, highlighting the importance of tracking these revisions for investment decisions [5]

Financial Data and Key Metrics Changes - The company reported Q2 revenues of $499 million, an increase of 15% year-over-year [7] - GAAP net income for the quarter was $163 million, up 25%, with GAAP earnings per share at $6.59, a 28% increase from the prior year [8][22] - Non-GAAP net income was $193 million, also up 25%, with non-GAAP earnings per share at $7.81, a 27% increase [8][22] - Free cash flow for the quarter was $65 million, a 6% increase year-over-year, with total free cash flow over the last four quarters at $677 million, up 45% [8][23] Business Line Data and Key Metrics Changes - In the Scores segment, revenues were $297 million, up 25% year-over-year, with B2B revenues increasing by 31% primarily due to mortgage originations [9][17] - B2C revenues grew by 6%, driven by revenue from indirect channel partners [9][17] - Mortgage origination revenues surged by 48%, accounting for 54% of B2B revenue and 44% of total Scores revenue [9][10] - The Software segment reported revenues of $202 million, a 2% increase from the prior year, with on-premises and SaaS software revenue growing by 4% [13][18] Market Data and Key Metrics Changes - The Americas region contributed 86% of total company revenues, while EMEA generated 9% and Asia Pacific delivered 5% [18] - Total software ARR was $715 million, a 3% increase year-over-year, with platform ARR growing by 17% [19] - The dollar-based net retention rate for the quarter was 102%, with platform NRR at 110% and non-platform at 96% [20] Company Strategy and Development Direction - The company continues to focus on innovation, with new products and partnerships aimed at enhancing financial inclusion and customer engagement [10][12] - The strategy includes a land and expand approach to drive growth in ARR and NRR, with a focus on increasing customer usage [13][19] - The company is investing in indirect sales channels to enhance market reach and capitalize on opportunities in non-financial services [114] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a fluid macroeconomic environment but expressed confidence in the company's strategy and execution [24] - There is a cautious outlook regarding guidance due to uncertainty in the market, with management remaining conservative [31][39] - The company expects to see an acceleration in free cash flow in the second half of the fiscal year [23] Other Important Information - The company repurchased 112,000 shares in Q2 at an average price of $18.49 per share, viewing share repurchases as an attractive use of cash [24] - The upcoming FICO World Conference is expected to showcase innovations and customer success stories, serving as a significant sales pipeline building event [25][26] Q&A Session Summary Question: How did results compare to expectations? - Management noted that the results were in line with expectations, reflecting a conservative approach due to market uncertainty [31] Question: What is the outlook for software growth? - Management indicated that macroeconomic factors are impacting growth, but they remain optimistic about the platform side's strength [32][34] Question: Have there been changes in credit origination volumes? - Management reported no significant changes in credit origination volumes, but acknowledged the uncertainty in the macro environment [37][39] Question: What is the visibility into platform growth? - Management has some visibility into future growth but noted that macro conditions could affect deal closures [40][41] Question: Are there changes in customer behavior regarding platform sales cycles? - Management stated that there have been no significant changes in customer behavior or sales cycles [44][46] Question: What is the impact of the regulatory environment? - Management expressed that the regulatory environment remains favorable for the company, with ongoing conversations with regulators [74] Question: What are the strategic priorities moving forward? - Management highlighted upcoming innovations and the use of AI, with a focus on enhancing product offerings [125]

[Earnings Announcement & Fiscal Highlights](index=1&type=section&id=Earnings%20Announcement%20%26%20Fiscal%20Highlights) FICO reported strong Q2 FY25 GAAP and Non-GAAP results with significant growth in net income, EPS, and revenue, and reiterated positive fiscal year 2025 guidance [Second Quarter Fiscal 2025 GAAP Results](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20GAAP%20Results) FICO reported strong GAAP results for Q2 FY25, with net income and EPS increasing significantly year-over-year, alongside an increase in operating cash flow **Second Quarter Fiscal 2025 GAAP Results (in millions, except EPS):** | Metric | Q2 FY25 | Q2 FY24 | YoY Change | | :--- | :--- | :--- | :--- | | Net income | $162.6 | $129.8 | +25.3% | | EPS | $6.59 | $5.16 | +27.7% | | Net cash provided by operating activities | $74.9 | $71.0 | +5.5% | [Second Quarter Fiscal 2025 Non-GAAP Results](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20Non-GAAP%20Results) FICO's Non-GAAP results for Q2 FY25 also showed substantial growth in net income and EPS, alongside an increase in free cash flow compared to the prior year **Second Quarter Fiscal 2025 Non-GAAP Results (in millions, except EPS):** | Metric | Q2 FY25 | Q2 FY24 | YoY Change | | :--- | :--- | :--- | :--- | | Non-GAAP Net Income | $192.7 | $154.5 | +24.7% | | Non-GAAP EPS | $7.81 | $6.14 | +27.2% | | Free cash flow | $65.5 | $61.6 | +6.3% | [Second Quarter Fiscal 2025 GAAP Revenue Breakdown](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20GAAP%20Revenue%20Breakdown) Total revenue increased by 15% year-over-year, driven primarily by a 25% increase in Scores revenue, particularly B2B solutions. Software revenue also grew, mainly from increased license revenue **Second Quarter Fiscal 2025 GAAP Revenue (in millions):** | Segment | Q2 FY25 Revenue | Q2 FY24 Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $498.7 | $433.8 | +15% | | Scores revenues | $297.0 | $236.9 | +25% | | Software revenues | $201.7 | $196.9 | +2% | - B2B Scores revenue increased **31%**, largely due to higher unit prices[4](index=4&type=chunk) - B2C Scores revenue increased **6%** from increased revenue from indirect channel partners[4](index=4&type=chunk) - Software Annual Recurring Revenue (ARR) at March 31, 2025, was up **3%** year-over-year, consisting of **17%** platform ARR growth and a **3%** decline in non-platform ARR[4](index=4&type=chunk) - Total Software Dollar-Based Net Retention Rate was **102%** on March 31, 2025, with platform software at **110%** and non-platform software at **96%**[4](index=4&type=chunk) [Fiscal Year 2025 Guidance](index=2&type=section&id=Fiscal%20Year%202025%20Guidance) FICO reiterated its fiscal year 2025 guidance, projecting double-digit percentage growth for both revenue and earnings, with specific GAAP and Non-GAAP targets **Fiscal 2025 Guidance (in millions, except EPS):** | Metric | Guidance | | :--- | :--- | | Revenues | $1,980 | | GAAP Net Income | $624 | | GAAP EPS | $25.05 | | Non-GAAP Net Income | $712 | | Non-GAAP EPS | $28.58 | - FICO reiterates its fiscal year 2025 guidance, which includes **double-digit percentage growth** for both revenue and earnings[4](index=4&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) FICO, a pioneer in predictive analytics since 1956, holds over 200 patents and its FICO Score is a global credit risk standard, with solutions used in over 80 countries [About FICO](index=2&type=section&id=About%20FICO) FICO is a global analytics software leader, founded in 1956, known for pioneering predictive analytics and data science, holding over 200 patents, and its FICO Score being a standard measure of consumer credit risk globally - Founded in **1956**, FICO is a pioneer in predictive analytics and data science[6](index=6&type=chunk) - Holds over **200 U.S. and foreign patents** on technologies[6](index=6&type=chunk) - The FICO Score is used by **90% of top U.S. lenders** and available in over **40 other countries**[6](index=6&type=chunk) - Solutions are used by businesses in more than **80 countries** across financial services, insurance, telecommunications, health care, retail, and other industries[6](index=6&type=chunk) [Statement Concerning Forward-Looking Information](index=3&type=section&id=Statement%20Concerning%20Forward-Looking%20Information) This section provides a standard disclaimer regarding forward-looking statements, highlighting various risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially[7](index=7&type=chunk) - Risks include macroeconomic conditions, success of Decision Management strategy, customer relationships, product development, personnel retention, competition, regulatory changes, data protection, and global economic conditions[7](index=7&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements, and FICO disclaims any obligation to update them[7](index=7&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents FICO's unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flows, for the reported periods [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, FICO's total assets increased to **$1,835,753 thousand** from **$1,717,884 thousand** at September 30, 2024, primarily driven by increases in accounts receivable and prepaid expenses, while total liabilities also increased, leading to a larger stockholders' deficit **Condensed Consolidated Balance Sheets (In thousands):** | Metric | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total assets | $1,835,753 | $1,717,884 | | Total liabilities | $2,959,805 | $2,680,563 | | Stockholders' deficit | $(1,124,052) | $(962,679) | | Cash and cash equivalents | $146,641 | $150,667 | | Accounts receivable, net | $492,542 | $426,642 | | Long-term debt | $2,513,179 | $2,194,021 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the quarter ended March 31, 2025, FICO reported a 15% increase in total revenues and a 26% increase in operating income year-over-year, leading to a 25% rise in net income and diluted EPS growth **Condensed Consolidated Statements of Income (Quarter Ended March 31, In thousands, except per share data):** | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total revenues | $498,735 | $433,809 | +15% | | Operating income | $245,648 | $194,841 | +26.1% | | Net income | $162,615 | $129,799 | +25.3% | | Diluted EPS | $6.59 | $5.16 | +27.7% | **Condensed Consolidated Statements of Income (Six Months Ended March 31, In thousands, except per share data):** | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total revenues | $938,703 | $815,868 | +15.1% | | Operating income | $425,176 | $346,200 | +22.8% | | Net income | $315,143 | $250,864 | +25.6% | | Diluted EPS | $12.73 | $9.96 | +27.8% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended March 31, 2025, net cash provided by operating activities significantly increased to **$268,915 thousand** from **$193,155 thousand** in the prior year, while net cash used in investing and financing activities also increased **Condensed Consolidated Statements of Cash Flows (Six Months Ended March 31, In thousands):** | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $268,915 | $193,155 | +39.2% | | Net cash used in investing activities | $(19,883) | $(12,040) | +65.1% | | Net cash used in financing activities | $(247,723) | $(183,222) | +35.2% | | Cash and cash equivalents, end of period | $146,641 | $135,667 | +8.1% | [Non-GAAP Financial Measures & Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section details FICO's Non-GAAP financial results, provides a reconciliation of Non-GAAP guidance, and explains the rationale behind using these adjusted measures [Non-GAAP Results (Quarter and Six Months Ended March 31)](index=7&type=section&id=Non-GAAP%20Results%20(Quarter%20and%20Six%20Months%20Ended%20March%2031)) FICO's Non-GAAP net income and diluted EPS showed strong growth for both the quarter and six months ended March 31, 2025, after adjusting for specific non-cash and non-recurring items, with free cash flow also increasing **Non-GAAP Results (Quarter Ended March 31, In thousands, except per share data):** | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Non-GAAP net income | $192,689 | $154,492 | +24.7% | | Non-GAAP diluted EPS | $7.81 | $6.14 | +27.2% | | Free cash flow | $65,491 | $61,613 | +6.3% | **Non-GAAP Results (Six Months Ended March 31, In thousands, except per share data):** | Metric | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Non-GAAP net income | $336,478 | $275,716 | +22.0% | | Non-GAAP diluted EPS | $13.59 | $10.95 | +24.1% | | Free cash flow | $252,317 | $182,372 | +38.3% | [Reconciliation of Non-GAAP Guidance (Fiscal 2025)](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Guidance%20(Fiscal%202025)) FICO provided a reconciliation of its fiscal 2025 GAAP guidance to Non-GAAP guidance, primarily adjusting for share-based compensation expense and income tax adjustments to arrive at higher Non-GAAP net income and EPS targets **Reconciliation of Non-GAAP Guidance (Fiscal 2025, In millions, except per share data):** | Metric | GAAP Guidance | Adjustments | Non-GAAP Guidance | | :--- | :--- | :--- | :--- | | Net income | $624 | +$157 (Share-based comp) - $39 (Income tax adj) - $30 (Excess tax benefit) | $712 | | Diluted EPS | $25.05 | +$6.31 (Share-based comp) - $1.58 (Income tax adj) - $1.20 (Excess tax benefit) | $28.58 | [Explanation of Non-GAAP Financial Measures](index=7&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) FICO uses non-GAAP financial measures to provide supplemental information, excluding certain items to offer a clearer view of recurring business results and aid management in financial and operational decision-making - Non-GAAP financial measures include non-GAAP net income, non-GAAP EPS, and free cash flow[16](index=16&type=chunk)[17](index=17&type=chunk)[20](index=20&type=chunk) - These measures exclude items such as amortization expense, share-based compensation expense, restructuring and acquisition-related items, excess tax benefit, and capital expenditures[16](index=16&type=chunk)[17](index=17&type=chunk)[20](index=20&type=chunk) - Management uses these measures for financial and operational decision-making, evaluating period-to-period comparisons, and assessing performance by excluding items not indicative of recurring business results[16](index=16&type=chunk)[17](index=17&type=chunk)[20](index=20&type=chunk) [Investor Information](index=2&type=section&id=Investor%20Information) This section provides details for FICO's upcoming investor conference call and contact information for investor and analyst inquiries [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) FICO will host a webcast on April 29, 2025, to discuss its Q2 FY25 results and provide updates, accessible via its investor relations website - Date: **April 29, 2025**[5](index=5&type=chunk) - Time: **5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)**[5](index=5&type=chunk) - Purpose: Report second quarter fiscal 2025 results and provide strategic and operational updates[5](index=5&type=chunk) - Access: FICO's website at www.fico.com/investors[5](index=5&type=chunk) [Contacts](index=8&type=section&id=Contacts) Investor and analyst inquiries can be directed to Dave Singleton at Fair Isaac Corporation via phone or email - Investors/Analysts Contact: Dave Singleton[22](index=22&type=chunk) - Company: Fair Isaac Corporation[22](index=22&type=chunk) - Phone: (800) 459-7125[22](index=22&type=chunk) - Email: investor@fico.com[22](index=22&type=chunk)