Financial Performance - Total revenues for the quarter ended June 30, 2024, were $447.8 million, a 12% increase from the same quarter in 2023[69]. - Revenues for the Scores segment were $241.5 million during the quarter ended June 30, 2024, a 20% increase from the same quarter in 2023[69]. - Annual Recurring Revenue for the Software segment as of June 30, 2024, was $709.6 million, a 10% increase from June 30, 2023[69]. - Operating income for the quarter ended June 30, 2024, was $190.3 million, a 7% increase from the same quarter in 2023[69]. - Net income for the quarter ended June 30, 2024, was $126.3 million, a 2% decrease from the same quarter in 2023[69]. - Diluted EPS for the quarter ended June 30, 2024, was $5.05, a 1% decrease from the same quarter in 2023[69]. - For the nine months ended June 30, 2024, total revenues reached $1.26 billion, a 12% increase from $1.12 billion in the same period of 2023[83]. - Net income for the nine months ended June 30, 2024, was $377.1 million, a 15% increase from $328.0 million in the same period of 2023[86]. Cash Flow and Debt - Cash flows from operating activities for the nine months ended June 30, 2024, were $406.5 million, compared to $304.9 million for the same period in 2023[69]. - Total debt balance as of June 30, 2024, was $2.1 billion, an increase from $1.9 billion as of September 30, 2023[69]. - Net cash used in financing activities increased to $365.0 million for the nine months ended June 30, 2024, up from $271.2 million in the prior year, primarily due to increased stock repurchases[117]. - The company has a total credit capacity of $1.35 billion, including a $600 million unsecured revolving line of credit and a $450 million unsecured term loan[122]. - As of June 30, 2024, the company had $118.0 million in borrowings under the revolving line of credit at a weighted-average interest rate of 6.688%[123]. Segment Performance - The Scores segment revenues for the quarter ended June 30, 2024, were $241.5 million, a 20% increase from $201.8 million in the same quarter of 2023[81]. - The Software segment revenues for the quarter ended June 30, 2024, were $206.4 million, reflecting a 5% increase from $196.9 million in the same quarter of 2023[81]. - The platform segment's ARR grew from $113.1 million to $164.1 million, reflecting a year-over-year increase of 45.2%[76]. - The non-platform segment's ARR increased from $437.0 million to $496.2 million, showing a year-over-year growth of 13.5%[76]. - Scores segment operating income increased by $36.0 million, driven by a $39.7 million increase in segment revenue, resulting in an operating income margin of 88%[106]. - Software segment operating income decreased by $5.3 million due to a $14.8 million increase in operating expenses, with an operating income margin dropping to 34% from 38%[107]. Expenses and Operating Metrics - Total operating expenses for Q2 2024 increased to $257.6 million, a 16% rise from $221.7 million in Q2 2023[85]. - Research and development expenses for Q2 2024 were $44.2 million, representing 10% of revenues, down from 11% in Q2 2023[90]. - Selling, general and administrative expenses for Q2 2024 totaled $124.9 million, accounting for 28% of revenues, up from 27% in Q2 2023[93]. - Interest expense for Q2 2024 was $26.9 million, an increase of 9% from $24.5 million in Q2 2023[85]. - The effective income tax rate for Q2 2024 was 24.5%, compared to 18.4% in Q2 2023[102]. Stock and Shareholder Returns - Total share repurchases during the quarter ended June 30, 2024, were $255.5 million, compared to $98.6 million during the same quarter in 2023[69]. - The company approved a new stock repurchase program in July 2024, authorizing repurchases up to $1.0 billion[120]. Future Outlook - The company anticipates continued growth in both platform and non-platform segments, with a focus on expanding SaaS offerings and enhancing customer retention strategies[78].

Company Performance - Fair Isaac Corporation (FICO) is expected to report strong fiscal third-quarter 2024 results, benefiting from growth in scores and software solutions, with scores revenues estimated at $241 million, reflecting a 19.3% year-over-year increase [3] - The consensus estimate for FICO's on-premises and SaaS software revenues is $185 million, indicating a 7.55% year-over-year increase [4] - FICO's software business is anticipated to benefit from its "land-and-expand" strategy, with positive trends in Annual Recurring Revenue (ARR) and Net Revenue Retention (NRR) [10] Earnings Estimates - The consensus mark for FICO's earnings is set at $6.37 per share, which has decreased by a penny over the past 30 days [2] - FICO has an Earnings ESP of -1.83% and a Zacks Rank of 4 (Sell), indicating a lower likelihood of an earnings beat [5][18] Market Trends - The Scores segment, particularly in mortgage originations, continues to show robust growth, driven by the adoption of FICO Score 10T for non-conforming mortgages [16] - The company is investing heavily in innovation, with advancements showcased at the recent FICO World event, including an open API framework and a FICO marketplace, expected to enhance customer satisfaction and usage [17] Other Companies - Apple (AAPL) is set to report its third-quarter fiscal 2024 results on August 1, with shares gaining 13.2% year to date and a revenue estimate of $448.53 million, suggesting a 12.5% increase from the previous year [7][8] - Shopify (SHOP) is scheduled to report its second-quarter 2024 results on August 7, with shares declining 23.1% year to date and an Earnings ESP of +7.78% [11][19] - Cognizant Technology Solutions (CTSH) has an Earnings ESP of +0.09% and is set to report second-quarter 2024 results on July 31 [12][21]

Core Insights - The upcoming earnings report for Fair Isaac (FICO) is expected to show a year-over-year earnings increase, with a consensus EPS estimate of $6.37, reflecting a 12.5% growth from the previous year [17][2]. - The Zacks Earnings ESP indicates a negative reading of -1.83%, suggesting that analysts have recently become bearish on the company's earnings prospects [21]. - The consensus EPS estimate has been revised 0.24% lower over the last 30 days, indicating a reassessment of the company's earnings outlook by covering analysts [18]. Group 1: Earnings Expectations - Fair Isaac is projected to report revenues of $448.53 million, which is a 12.5% increase compared to the same quarter last year [2]. - The company has a history of beating consensus EPS estimates, having done so two out of the last four quarters [13]. - The earnings report is anticipated to be released on July 31, 2024, and could significantly impact the stock price depending on whether the results meet or exceed expectations [16]. Group 2: Analyst Insights - The Zacks Earnings ESP model compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being a more recent version that may reflect the latest information [4]. - A negative Earnings ESP reading does not necessarily indicate an earnings miss, but it complicates the prediction of an earnings beat [5]. - The predictive power of the Earnings ESP model is significant primarily for positive readings, with a strong correlation to earnings beats when combined with a favorable Zacks Rank [20]. Group 3: Market Sentiment - Despite the potential for an earnings beat, Fair Isaac does not currently appear to be a compelling candidate for such an outcome, and investors should consider other factors before making investment decisions [15]. - The stock carries a Zacks Rank of 4, indicating a sell recommendation, which may further influence investor sentiment [6]. - The overall market expectation is that earnings will increase due to higher revenues, but actual results will be crucial in determining stock performance [7].

Group 1: MicroStrategy (MSTR) - MicroStrategy is recognized as "building the world's largest Bitcoin company" with analysts projecting an additional 80% upside for its stock [2] - The company announced a 10-for-1 stock split on July 11, leading to a 7% surge in share price, which has increased over 230% in the last 12 months, trading at $1,500 per share [6][15] - Following the split, the adjusted share price will be approximately $150, and MicroStrategy holds 226,331 Bitcoin valued at $13.30 billion [15] Group 2: NVR (NVR) - NVR has never split its stock since going public in 1993, resulting in a high share price of $8,000, which limits accessibility for most investors [4][8] - Despite the high price, NVR's stock has gained nearly 30% over the last 12 months, including a 15% gain this year, with a reasonable price-earnings ratio of 16 times future earnings estimates [17] Group 3: Fair Isaac Corp. (FICO) - Fair Isaac Corp. is a strong candidate for a stock split, with its share price at $1,550, nearly doubling in the last year and showing a 37% year-to-date gain [11][16] - The company has not split its stock in 20 years, and a split could make shares more accessible to retail investors, given its near-monopoly in U.S. credit scoring [16]

Core Viewpoint - Nvidia's recent 10-for-1 stock split may encourage other companies to consider similar actions to make their shares more accessible to average investors [1][2]. Group 1: Nvidia Stock Split - Nvidia's stock split will occur after market close on June 7, marking its second split in three years, following a four-for-one split in July 2021 [1]. - Shareholders will receive nine new shares for every existing share held, making the stock more affordable for retail investors [1]. Group 2: NVR (NVR) - NVR is a leading home builder in the U.S., operating in 36 metropolitan markets across 16 states, with a focus on single-family homes [4]. - The company's stock price has increased significantly from $3,400 five years ago to over $7,750 currently, necessitating an 80-for-1 stock split to reach a price of $100 [6]. Group 3: MercadoLibre (MELI) - MercadoLibre, a prominent Latin American company, has never conducted a stock split in its 25-year history, with current shares trading over $1,700 [8]. - The company's stock has appreciated 181% over the past five years, significantly outperforming the S&P 500, and analysts suggest a stock split could make shares more accessible [9][10]. Group 4: Fair Isaac (FICO) - Fair Isaac is known for its FICO score, with two main segments: Scores and Software, both of which saw revenue growth in Q2 2024 [12][13]. - The company anticipates nearly $1.7 billion in revenues for 2024, with a non-GAAP earnings per share estimate of $22.80, indicating a high valuation at 56.5 times those earnings [14][15].

Fair Isaac (FICO) reported second-quarter fiscal 2024 earnings of $6.14 per share, beating the Zacks Consensus Estimate by 5.86% and rising 28.5% year over year.Revenues of $433.8 million increased 14.1% on a year-over-year basis and beat the consensus mark by 1.85%. Americas, EMEA and Asia Pacific contributed 85%, 9% and 6% to total revenues, respectively.Top-Line DetailsSoftware revenues, which include Fair Isaac’s analytics and digital decisioning technology, as well as associated professional services, ...

For the quarter ended March 2024, Fair Isaac (FICO) reported revenue of $433.81 million, up 14.1% over the same period last year. EPS came in at $6.14, compared to $4.78 in the year-ago quarter.The reported revenue represents a surprise of +1.85% over the Zacks Consensus Estimate of $425.94 million. With the consensus EPS estimate being $5.80, the EPS surprise was +5.86%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ex ...

Financial Data and Key Metrics Changes - The company reported Q2 revenues of $434 million, an increase of 14% year-over-year [7] - GAAP net income for the quarter was $130 million, up 28% from the prior year, with GAAP earnings of $5.16 per share, a 29% increase [7][15] - Non-GAAP net income was $154 million, reflecting a 27% increase year-over-year [15] - Free cash flow for Q2 was $62 million, a 30% decrease from the prior year [47] - Total debt at quarter end was $2.04 billion with a weighted average interest rate of 5.2% [16] Business Line Data and Key Metrics Changes - In the Score segment, revenues were $237 million, up 19% year-over-year [8][44] - B2B revenues increased by 28%, primarily driven by mortgage originations, which saw an 85% increase [9][23] - B2C revenues decreased by 4% due to volume declines in the myfico.com business [23] - Software business revenues reached $197 million, an 8% increase from the previous year, with growth in on-premises and SaaS software [10][45] - Total Annual Recurring Revenue (ARR) was up 14%, with platform ARR growing 32% and non-platform ARR growing 8% [10][25] Market Data and Key Metrics Changes - The Americas region accounted for 84% of total company revenues, while EMEA generated 10% and Asia-Pacific delivered 6% [24] - The total Net Revenue Retention (NRR) for the quarter was 112%, with platform NRR at 126% and non-platform NRR at 106% [20][25] Company Strategy and Development Direction - The company continues to invest in innovation and is raising its full-year guidance as it enters the second half of the fiscal year [28] - The strategy focuses on expanding customer adoption and use cases of the FICO platform, emphasizing data-driven solutions executed in real-time [28] - The company is committed to returning capital to shareholders through buybacks, with $367 million remaining on the repurchase authorization [8][48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment but noted strong growth in the Scores business despite lower volumes due to current rate conditions [28] - The company does not expect significant improvements in the mortgage market in the fiscal year, indicating a cautious outlook [34] - Management emphasized the importance of transparency in pricing strategies, particularly in the mortgage sector, to address regulatory concerns [38] Other Important Information - The company hosted FICO World, which included 1,200 attendees from over 400 companies, showcasing the benefits of the FICO platform [20][21] - The effective tax rate for the quarter was 25%, with expectations for a fiscal year 2024 net effective tax rate around 22% [47] Q&A Session Summary Question: Concerns about platform growth deceleration - Management noted that the platform growth has slowed but remains sustainable, with no significant concerns regarding customer demand [32][33] Question: Long-term pricing strategy in mortgage - Management explained that pricing increases are aimed at closing the gap on value provided, emphasizing transparency in pricing [37][38] Question: Impact of macro environment on software bookings - Management acknowledged that some delays in projects are due to the macro environment, but there are no losses to competition [41] Question: Future expectations for professional services revenue - Management indicated that professional services revenue is expected to stabilize, with a focus on maintaining quality installations [60] Question: Capital return strategy and buyback pace - The company remains committed to buybacks, intending to spend at least its free cash flow on repurchases [59] Question: Software retention rates and expansion - Management highlighted that customers typically expand their use cases over time, indicating strong retention rates [89]

PART I – FINANCIAL INFORMATION [Item 1. Unaudited Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents Fair Isaac Corporation's unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flows, for periods ending March 31, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Summarizes the company's financial position, showing assets, liabilities, and stockholders' deficit as of March 31, 2024, and September 30, 2023 | | March 31, 2024 (In thousands) | September 30, 2023 (In thousands) | | :--- | :--- | :--- | | **Total current assets** | $641,472 | $556,448 | | **Total assets** | $1,703,117 | $1,575,281 | | **Total current liabilities** | $315,120 | $367,688 | | **Total liabilities** | $2,438,777 | $2,263,271 | | **Total stockholders' deficit** | $(735,660) | $(687,990) | [Condensed Consolidated Statements of Income and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Presents the company's revenues, operating income, net income, and diluted EPS for the three and six-month periods ended March 31, 2024 and 2023 Financial Performance (Quarter Ended March 31) | Metric | 2024 (In thousands) | 2023 (In thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Total revenues** | $433,809 | $380,266 | +14.1% | | **Operating income** | $194,841 | $159,761 | +22.0% | | **Net income** | $129,799 | $101,550 | +27.8% | | **Diluted EPS** | $5.16 | $4.00 | +29.0% | Financial Performance (Six Months Ended March 31) | Metric | 2024 (In thousands) | 2023 (In thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Total revenues** | $815,868 | $725,136 | +12.5% | | **Operating income** | $346,200 | $300,100 | +15.4% | | **Net income** | $250,864 | $199,193 | +26.0% | | **Diluted EPS** | $9.96 | $7.83 | +27.2% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Details the company's cash flows from operating, investing, and financing activities for the six months ended March 31, 2024 and 2023 Cash Flow Summary (Six Months Ended March 31) | Activity | 2024 (In thousands) | 2023 (In thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $193,155 | $182,244 | | **Net cash used in investing activities** | $(12,040) | $(11,887) | | **Net cash used in financing activities** | $(183,222) | $(173,245) | | **Increase (decrease) in cash and cash equivalents** | $(1,111) | $4,569 | | **Cash and cash equivalents, end of period** | $135,667 | $137,771 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, financial statement components, debt structure, segment performance, and revenue recognition [Note 6. Debt](index=13&type=section&id=Note%206.%20Debt) Details the company's debt composition, totaling approximately **$2.04 billion** as of March 31, 2024, and compliance with financial covenants Debt Composition (at carrying value) | Debt Component | March 31, 2024 (In thousands) | September 30, 2023 (In thousands) | | :--- | :--- | :--- | | Revolving line of credit | $488,000 | $300,000 | | Term loan | $266,250 | $273,750 | | Senior Notes (2018, 2019, 2021) | $1,300,000 | $1,300,000 | | **Total debt (before issuance costs)** | **$2,054,250** | **$1,873,750** | - The company has a **$600 million** unsecured revolving line of credit and a **$300 million** unsecured term loan, both maturing in August 2026[43](index=43&type=chunk) [Note 7. Revenue from Contracts with Customers](index=15&type=section&id=Note%207.%20Revenue%20from%20Contracts%20with%20Customers) Disaggregates revenue by geography and customer concentration, highlighting Americas as the primary region and significant revenue from major consumer reporting agencies Revenue by Geography (Quarter Ended March 31, 2024) | Region | Revenue (In thousands) | Percentage | | :--- | :--- | :--- | | Americas | $364,017 | 84% | | Europe, Middle East and Africa | $42,257 | 10% | | Asia Pacific | $27,535 | 6% | | **Total** | **$433,809** | **100%** | - Revenues from the three major consumer reporting agencies (TransUnion, Equifax, Experian) accounted for **47% of total revenues** in Q2 2024, up from **43%** in Q2 2023[53](index=53&type=chunk) - Revenue allocated to remaining performance obligations was **$481.7 million** as of March 31, 2024, with approximately **50%** expected to be recognized over the next 16 months[58](index=58&type=chunk) [Note 10. Segment Information](index=18&type=section&id=Note%2010.%20Segment%20Information) Provides financial performance details for the Scores and Software segments, including revenue and operating income for the quarter ended March 31, 2024 Segment Performance (Quarter Ended March 31, 2024 vs 2023) | Segment | Revenue 2024 (In thousands) | Revenue 2023 (In thousands) | Operating Income 2024 (In thousands) | Operating Income 2023 (In thousands) | | :--- | :--- | :--- | :--- | :--- | | **Scores** | $236,885 | $198,507 | $212,208 | $175,405 | | **Software** | $196,924 | $181,759 | $64,162 | $54,867 | - The Scores segment includes B2B and B2C scoring solutions, while the Software segment includes decision management solutions, FICO Platform, and associated professional services[64](index=64&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the quarter and six months ended March 31, 2024, covering revenue growth, segment results, and liquidity Q2 2024 Financial Highlights (YoY) | Metric | Q2 2024 | Change vs Q2 2023 | | :--- | :--- | :--- | | Total Revenue | $433.8M | +14% | | Scores Revenue | $236.9M | +19% | | Operating Income | $194.8M | +22% | | Net Income | $129.8M | +28% | | Diluted EPS | $5.16 | +29% | [Key Performance Metrics for Software Segment](index=22&type=section&id=Key%20performance%20metrics%20for%20Software%20segment) Presents key non-GAAP performance metrics for the Software segment, including Annual Recurring Revenue, Dollar-Based Net Retention Rate, and ACV Bookings Software Segment Key Metrics | Metric | As of March 31, 2024 | YoY Change | | :--- | :--- | :--- | | Annual Recurring Revenue (ARR) | $697.0 million | +14% | | Dollar-Based Net Retention Rate (DBNRR) | 112% | -2 p.p. | | ACV Bookings (Q2) | $16.8 million | -27.9% | [Results of Operations](index=24&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's revenue and operating income performance, detailing segment-specific drivers and operating expense trends for the quarter - Scores B2B revenue growth was driven by higher unit prices, which offset a decrease in mortgage origination volume[88](index=88&type=chunk) - The decrease in professional services revenue is attributed to a strategic emphasis on higher-margin software products[89](index=89&type=chunk) - Operating expenses increased **8% YoY**, slower than the **14% revenue growth**, leading to operating margin expansion. The main drivers of expense growth were personnel and labor costs, including increased share-based compensation[92](index=92&type=chunk)[99](index=99&type=chunk) [Capital Resources and Liquidity](index=30&type=section&id=CAPITAL%20RESOURCES%20AND%20LIQUIDITY) Discusses the company's cash position, cash flows from operations, share repurchase activities, and overall liquidity and capital resources Six-Month Cash Flow Summary (Ended March 31) | Flow | 2024 (In millions) | 2023 (In millions) | | :--- | :--- | :--- | | Operating activities | $193.2 | $182.2 | | Investing activities | $(12.0) | $(11.9) | | Financing activities | $(183.2) | $(173.2) | - The company repurchased **$179.5 million** of its common stock in the quarter ended March 31, 2024, and **$251.3 million** in the six-month period[128](index=128&type=chunk) - The company believes existing cash, available borrowings from its **$600 million** revolving line of credit, and operating cash flows will be sufficient to fund capital requirements for at least the next 12 months[122](index=122&type=chunk) PART II – OTHER INFORMATION [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) States that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes from the risk factors disclosed in the company's Annual Report on Form 10-K[144](index=144&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the company's repurchases of its own equity securities during the quarter and the status of its stock repurchase programs Issuer Purchases of Equity Securities (Q2 2024) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2024 | 42,512 | $1,182.34 | | February 2024 | 50,154 | $1,277.94 | | March 2024 | 52,830 | $1,266.00 | | **Total** | **145,496** | **$1,245.67** | - As of March 31, 2024, **$366.7 million** remained available for repurchase under the current open-ended program authorized in January 2024[145](index=145&type=chunk)[146](index=146&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes to internal control over financial reporting - The CEO and CFO concluded that FICO's disclosure controls and procedures were effective as of March 31, 2024[140](index=140&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[141](index=141&type=chunk)

[FICO Q2 Fiscal 2024 Earnings Release](index=1&type=section&id=FICO%20Q2%20Fiscal%202024%20Earnings%20Release) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) FICO's Q2 fiscal 2024 saw a 14% revenue increase to $433.8 million, though operating cash flow declined Q2 Fiscal 2024 Key Financial Metrics (YoY) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $433.8M | $380.3M | +14.1% | | **GAAP Net Income** | $129.8M | $101.6M | +27.8% | | **GAAP EPS (Diluted)** | $5.16 | $4.00 | +29.0% | | **Non-GAAP Net Income** | $154.5M | $121.4M | +27.3% | | **Non-GAAP EPS (Diluted)** | $6.14 | $4.78 | +28.5% | | **Net Cash from Operations** | $71.0M | $89.8M | -20.9% | | **Free Cash Flow** | $61.6M | $88.3M | -30.2% | [GAAP Results](index=1&type=section&id=GAAP%20Results) GAAP net income rose to $129.8 million, while net cash from operating activities decreased to $71.0 million Q2 GAAP Financials (YoY) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Income | $129.8M | $101.6M | | EPS (Diluted) | $5.16 | $4.00 | - Net cash provided by operating activities **decreased to $71.0 million** from $89.8 million in the prior year period[3](index=3&type=chunk) [Non-GAAP Results](index=1&type=section&id=Non-GAAP%20Results) Non-GAAP net income grew to $154.5 million, but free cash flow declined to $61.6 million Q2 Non-GAAP Financials (YoY) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Non-GAAP Net Income | $154.5M | $121.4M | | Non-GAAP EPS (Diluted) | $6.14 | $4.78 | - **Free cash flow decreased to $61.6 million** for the current quarter versus $88.3 million in the prior year period[4](index=4&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) Both Scores and Software segments reported revenue growth, driven by B2B pricing and recurring software revenue Q2 Revenue by Segment (YoY) | Segment | Q2 2024 Revenue | Q2 2023 Revenue | Growth | | :--- | :--- | :--- | :--- | | Scores | $236.9M | $198.5M | +19% | | Software | $196.9M | $181.8M | +8% | [Scores Segment](index=1&type=section&id=Scores%20Segment) Scores segment revenue grew 19% to $236.9 million, led by a 28% increase in B2B revenue - **B2B revenue increased 28%**, driven largely by higher unit prices, which were partially offset by a decrease in mortgage origination volumes[5](index=5&type=chunk) - **B2C revenue decreased 4%** from the prior year period due to lower volumes on myFICO.com business[5](index=5&type=chunk) [Software Segment](index=1&type=section&id=Software%20Segment) Software segment revenue increased 8% to $196.9 million, supported by a 14% rise in Annual Recurring Revenue - **Software Annual Recurring Revenue (ARR) increased 14%** year-over-year, with platform ARR growing 32% and non-platform ARR growing 8%[5](index=5&type=chunk) - The **Software Dollar-Based Net Retention Rate was 112%** as of March 31, 2024, with platform software at 126% and non-platform at 106%[5](index=5&type=chunk) [Fiscal 2024 Outlook](index=2&type=section&id=Fiscal%202024%20Outlook) FICO raised its full-year fiscal 2024 guidance, now expecting revenues of $1.690 billion and Non-GAAP EPS of $22.80 Updated Fiscal 2024 Guidance | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | Revenues | $1.675 billion | $1.690 billion | | GAAP Net Income | $490 million | $495 million | | GAAP EPS | $19.45 | $19.70 | | Non-GAAP Net Income | $566 million | $573 million | | Non-GAAP EPS | $22.45 | $22.80 | [Financial Statements](index=4&type=section&id=Financial%20Statements) The financial statements detail FICO's position, including a rise in total assets and quarterly revenue [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $1.703 billion, while the stockholders' deficit widened to $(735.7) million Key Balance Sheet Items (in thousands) | Account | March 31, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Total current assets | $641,472 | $556,448 | | **Total assets** | **$1,703,117** | **$1,575,281** | | Total current liabilities | $315,120 | $367,688 | | **Total liabilities** | **$2,438,777** | **$2,263,271** | | **Stockholders' deficit** | **$(735,660)** | **$(687,990)** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Quarterly revenues increased to $433.8 million, driving growth in operating and net income Q2 Income Statement Highlights (in thousands, YoY) | Account | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total revenues | $433,809 | $380,266 | | Operating income | $194,841 | $159,761 | | Net income | $129,799 | $101,550 | | Diluted EPS | $5.16 | $4.00 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Six-month operating cash flow was $193.2 million, with significant cash used for stock repurchases Six-Month Cash Flow Summary (in thousands, YoY) | Activity | Six Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net cash from operating activities | $193,155 | $182,244 | | Net cash used in investing activities | $(12,040) | $(11,887) | | Net cash used in financing activities | $(183,222) | $(173,245) | | **Increase (decrease) in cash** | **$(1,111)** | **$4,569** | - **Repurchases of common stock amounted to $243.5 million** in the first six months of fiscal 2024, compared to $184.3 million in the same period of 2023[17](index=17&type=chunk) [Non-GAAP Reconciliation](index=7&type=section&id=Non-GAAP%20Reconciliation) This section reconciles GAAP to non-GAAP measures, adjusting for items like share-based compensation - Management uses non-GAAP financial measures for financial and operational decision-making and to evaluate period-to-period comparisons, believing they provide meaningful supplemental information by excluding items not indicative of recurring business results[21](index=21&type=chunk)[25](index=25&type=chunk) - Non-GAAP measures exclude items such as amortization expense, share-based compensation, restructuring costs, and certain tax benefits[20](index=20&type=chunk)[24](index=24&type=chunk) [Reconciliation of Non-GAAP Results](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Results) Q2 GAAP net income of $129.8 million is reconciled to Non-GAAP net income of $154.5 million Q2 2024 GAAP to Non-GAAP Net Income Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP net income | $129,799 | | Share-based compensation expense | $35,448 | | Other adjustments (Amortization, Tax) | $(10,755) | | **Non-GAAP net income** | **$154,492** | Q2 2024 Free Cash Flow Calculation (in thousands) | Description | Amount | | :--- | :--- | | Net cash provided by operating activities | $71,035 | | Capital expenditures | $(9,422) | | **Free cash flow** | **$61,613** | [Reconciliation of Non-GAAP Guidance](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Guidance) Fiscal 2024 guidance reconciles projected GAAP net income of $495 million to Non-GAAP net income of $573 million Updated FY2024 GAAP to Non-GAAP Guidance Reconciliation (in millions) | Description | Net Income | Diluted EPS | | :--- | :--- | :--- | | **GAAP Guidance** | **$495** | **$19.70** | | Share-based compensation expense | $140 | $5.57 | | Other adjustments (Amortization, Tax) | $(62) | $(2.47) | | **Non-GAAP Guidance** | **$573** | **$22.80** |