Fair Isaac (FICO) came out with quarterly earnings of $7.81 per share, beating the Zacks Consensus Estimate of $7.39 per share. This compares to earnings of $6.14 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of 5.68%. A quarter ago, it was expected that this financial services company would post earnings of $6.21 per share when it actually produced earnings of $5.79, delivering a surprise of -6.76%. Empirical research shows ...

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]

Exhibit 99.1 FICO Announces Earnings of $6.59 per Share for Second Quarter Fiscal 2025 Revenue of $499 million vs. $434 million in prior year BOZEMAN, Mont.--(BUSINESS WIRE)--April 29, 2025--FICO (NYSE:FICO), a global analytics software leader, today announced results for its second fiscal quarter ended March 31, 2025. Second Quarter Fiscal 2025 GAAP Results Net income for the quarter totaled $162.6 million, or $6.59 per share, versus $129.8 million, or $5.16 per share, in the prior year period. Net cash pr ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-11689 Fair Isaac Corporation (Exact name of registrant as specified in its charter) Delaware 94-1499887 (State or o ...

Core Viewpoint - Fair Isaac Corporation (FICO) is expected to report strong revenue and earnings growth for the second quarter of fiscal 2025, driven by innovations in its scoring business and increased adoption of its FICO Score 10T product. Financial Performance - The Zacks Consensus Estimate for second-quarter fiscal 2025 revenues is $496.22 million, indicating a 14.39% increase from the previous year [1] - The consensus estimate for earnings is $7.39 per share, reflecting a 20.36% year-over-year growth [1] Recent Performance Trends - FICO's earnings have missed the Zacks Consensus Estimate in three of the last four quarters, with an average negative surprise of 0.92% [2] - The company has seen sustained growth in Scores revenues, supported by continuous innovation and the incorporation of Buy Now, Pay Later loan data into its scoring models [3] Product Development and Market Position - The expansion of FICO Score 10T for non-GSE mortgages is likely to have driven revenue growth, supported by customer adoption and expansion among existing clients [4] - FICO's land-and-expand strategy and increased recurring revenues have strengthened its market position, contributing to sustained growth [5] Industry Leadership - FICO reported strong adoption momentum for FICO Score 10T in mortgage origination, with loans utilizing this score beginning to trade on the MCT Marketplace, indicating broader market acceptance [6] Earnings Expectations - According to the Zacks model, FICO has an Earnings ESP of -1.71% and a Zacks Rank of 3, suggesting a moderate likelihood of an earnings beat [7]

Core Viewpoint - Fair Isaac (FICO) is expected to report strong quarterly earnings and revenue growth, with analysts predicting earnings per share (EPS) of $7.39, a 20.4% increase year-over-year, and revenues of $496.22 million, reflecting a 14.4% increase compared to the same period last year [1]. Earnings Estimates - The consensus EPS estimate has been revised down by 0.1% over the last 30 days, indicating a slight reevaluation by analysts [2]. - Revisions to earnings estimates are crucial as they serve as indicators for potential investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3]. Revenue Projections - Analysts estimate 'Revenues- Professional services' at $19.18 million, a decrease of 2.9% from the prior year [5]. - 'Revenues- Software' is projected to reach $211.53 million, an increase of 7.4% year-over-year [5]. - 'Revenues- Scores' are expected to be $286.00 million, reflecting a 20.7% increase from the previous year [5]. - 'Revenues- On-premises and SaaS software' are forecasted at $192.35 million, indicating an 8.6% year-over-year increase [6]. - 'Revenues- Scores- Business-to-consumer' is expected to be $52.90 million, a 3% increase from the prior year [6]. - 'Revenues- Scores- Business-to-business' is projected to reach $235.89 million, a significant increase of 27.2% year-over-year [6]. Annual Recurring Revenue (ARR) - 'Annual Recurring Revenue (ARR) - Platform' is estimated at $248.73 million, up from $201.40 million a year ago [7]. - The total 'Annual Recurring Revenue (ARR) - Total' is projected to be $751.38 million, compared to $697 million in the same quarter last year [7]. - 'Annual Recurring Revenue (ARR) - Non-Platform' is expected to reach $502.65 million, an increase from $495.60 million reported in the same quarter of the previous year [8]. Stock Performance - Fair Isaac shares have increased by 3.5% over the past month, contrasting with the Zacks S&P 500 composite's decline of 4.8% [9].

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Core Viewpoint - Fair Isaac (FICO) reported mixed financial results for Q1 fiscal 2025, with earnings per share missing estimates but revenues showing year-over-year growth. The company is experiencing a positive trend in its stock performance, outperforming the S&P 500, but there are concerns about future earnings guidance and downward estimate revisions [1][2][10]. Financial Performance - Q1 fiscal 2025 earnings were $5.79 per share, missing the Zacks Consensus Estimate by 6.76% but increasing 20.4% year over year [2]. - Revenues reached $440 million, a 15.2% increase year over year, but fell short of consensus estimates by 3.25% [2]. - Software revenues grew 8% year over year to $204.3 million, with Software Annual Recurring Revenues (ARR) increasing 6% [3]. Revenue Breakdown - The Americas contributed 87% to total revenues, while EMEA and Asia Pacific contributed 8% and 5%, respectively [2]. - On-premises and SaaS software revenues accounted for 42.3% of total revenues, increasing 10.3% year over year to $186 million [4]. - Scores, which include B2B and B2C scoring solutions, increased 22.7% year over year to $235.7 million, representing 53.6% of total revenues [4]. Segment Performance - B2B revenues surged 30% year over year, primarily due to higher unit prices and increased mortgage originations, while B2C revenues grew 3% [5]. - Mortgage originations revenues skyrocketed 110% year over year, making up 44% of B2B revenues and 34% of total scores revenues [5]. - Auto originations revenues increased by 5%, while credit card and personal loan revenues declined by 3% year over year [5]. Operating Metrics - Research & development expenses as a percentage of revenues decreased by 90 basis points to 10.3%, while selling, general, and administrative expenses increased by 180 basis points to 29.1% [7]. - Operating margin improved to 40.8%, expanding 120 basis points year over year [7]. Balance Sheet and Cash Flow - As of December 31, 2024, FICO had $184 million in cash and cash equivalents and total debt of $2.4 billion, up from $151 million in cash and $2.2 billion in debt as of September 30, 2024 [8]. - Cash flow from operations was $194 million, down from $226.4 million in the previous quarter, while free cash flow decreased to $187 million from $219.4 million [9]. Future Guidance - For fiscal 2025, FICO anticipates revenues of $1.98 billion and non-GAAP earnings of $28.58 per share [10]. - Recent estimates have trended downward, indicating a potential shift in market sentiment towards the stock [11][13].

Core Viewpoint - Fair Isaac's stock received a nearly 3% increase following a bullish upgrade by RBC Capital's analyst Ashish Sabadra, outperforming the S&P 500 index's marginal gain on the same day [1]. Group 1: Analyst Upgrade - RBC Capital's Ashish Sabadra upgraded Fair Isaac from a sector perform to an outperform rating, raising the price target from $2,040 to $2,170 per share [2]. - The upgrade reflects Sabadra's belief that Fair Isaac's stock is undervalued, particularly due to its dominance in mortgage scoring, which provides strong pricing power [3]. Group 2: Revenue Potential - Sabadra anticipates that Fair Isaac could potentially increase its annual recurring revenue (ARR) by over 30% due to favorable market conditions [3]. Group 3: Company Strengths - Fair Isaac is characterized as a shareholder-friendly company with a solid capital allocation strategy that may help mitigate negative impacts from adverse developments [4]. - The company possesses a strong economic moat and maintains a robust presence in its niche market, making it a worthy investment consideration [4].

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