FICO(US:FICO)2025-02-04 21:16Financial Performance - Total revenues for the quarter ended December 31, 2024, were $440.0 million, a 15% increase from $383.5 million in the same quarter of 2023[84] - Revenues for the Scores segment were $235.7 million, reflecting a 23% increase from $191.5 million in the prior year[84] - Annual Recurring Revenue (ARR) for the Software segment as of December 31, 2024, was $729.3 million, a 6% increase from $688.0 million as of December 31, 2023[84] - Operating income for the quarter was $179.5 million, a 19% increase from $150.8 million in the same quarter of 2023[84] - Net income for the quarter was $152.5 million, representing a 26% increase from $121.1 million in the prior year[84] - Diluted EPS for the quarter was $6.14, a 28% increase from $4.80 in the same quarter of 2023[84] - Total revenues for the quarter ended December 31, 2024, were $439.97 million, a 15% increase from $382.06 million in the same quarter of 2023[97] - Operating income for the quarter was $179.53 million, reflecting a 19% increase from $151.36 million in the prior year[109] - Net income for the quarter was $152.53 million, a 26% increase compared to $121.07 million in the same quarter of 2023[97] Cash Flow and Debt - Cash flows from operating activities were $194.0 million, compared to $122.1 million in the same quarter of 2023[84] - Total debt balance increased to $2.4 billion as of December 31, 2024, up from $2.2 billion as of September 30, 2024[84] - Net cash provided by operating activities increased to $194.0 million for the quarter ended December 31, 2024, up from $122.1 million in the same quarter of 2023, representing a $71.9 million increase[119] - Net cash used in investing activities rose to $8.9 million for the quarter ended December 31, 2024, compared to $2.4 million in the prior year, primarily due to a $6.3 million increase in capitalized internal-use software costs[120] - Net cash used in financing activities increased to $144.2 million for the quarter ended December 31, 2024, from $99.9 million in the same quarter of 2023, largely due to a $90.9 million increase in common stock repurchases[121] - The company has a new stock repurchase program authorized for up to $1.0 billion, with $600.7 million remaining as of December 31, 2024, after spending $159.7 million during the quarter[122] - As of December 31, 2024, the company had $425.0 million in borrowings under the revolving line of credit at a weighted-average interest rate of 5.762%[125] - The carrying value of the Senior Notes was $1.3 billion as of December 31, 2024, with compliance to all financial covenants[126] Expenses - Research and development expenses increased by $2.5 million, with R&D expenses as a percentage of revenues decreasing to 10% from 11% year-over-year[101] - Selling, general and administrative expenses rose by $23.6 million, with these expenses as a percentage of revenues increasing to 29% from 27% year-over-year[103] Segment Performance - Dollar-Based Net Retention Rate for the Software segment was 105% as of December 31, 2024[84] - Scores segment revenues increased by $43.6 million, driven by a $42.0 million rise in business-to-business scores revenue and a $1.6 million increase in business-to-consumer revenue[94] - Software segment revenues rose by $14.3 million, primarily due to a $17.3 million increase in on-premises and SaaS software revenue, partially offset by a $3.0 million decrease in professional services revenue[95] - Segment operating income for Scores increased by $35.1 million, while Software segment operating income rose by $5.6 million, contributing to a total segment operating income increase of $37.0 million[111] Tax and Legal Matters - The effective income tax rate for the quarter was (1.6)%, compared to 7.3% in the same quarter of 2023, influenced by excess tax benefits related to share-based compensation[108] - FICO is involved in a consolidated putative class action lawsuit alleging antitrust claims related to the distribution of FICO Scores, with some claims allowed to proceed to discovery[139] Risk Management - The company is exposed to market risks related to interest rates and foreign exchange rates, managing these risks through various financial instruments[131] - The company has entered into foreign currency forward contracts to mitigate foreign exchange rate risks associated with foreign-currency-denominated receivables[134] - As of December 31, 2024, FICO has outstanding foreign currency forward contracts with a total contract amount of $8,600,000 for Euro (EUR), $8,460,000 for British pound (GBP), and $8,967,000 for Singapore dollar (SGD)[135] - The fair value of the foreign currency forward contracts as of December 31, 2024, is $8,958,000 for Euro (EUR), $10,600,000 for British pound (GBP), and $6,600,000 for Singapore dollar (SGD)[135] - On September 30, 2024, the total contract amount for foreign currency forward contracts was $13,000,000 for Euro (EUR), $12,237,000 for British pound (GBP), and $7,404,000 for Singapore dollar (SGD)[135] - The fair value of the foreign currency forward contracts as of September 30, 2024, was $14,531,000 for Euro (EUR), $16,400,000 for British pound (GBP), and $5,800,000 for Singapore dollar (SGD)[135] Internal Controls - FICO's disclosure controls and procedures were evaluated and deemed effective as of December 31, 2024, ensuring timely reporting of required information[136] - No changes in FICO's internal control over financial reporting were identified during the reporting period that materially affected its internal controls[137]