FICO(FICO) - 2025 Q2 - Quarterly Results

Earnings Announcement & Fiscal Highlights 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 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 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 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] - B2C Scores revenue increased 6% from increased revenue from indirect channel partners[4] - 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] - 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] Fiscal Year 2025 Guidance 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] Company Overview 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 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] - Holds over 200 U.S. and foreign patents on technologies[6] - The FICO Score is used by 90% of top U.S. lenders and available in over 40 other countries[6] - Solutions are used by businesses in more than 80 countries across financial services, insurance, telecommunications, health care, retail, and other industries[6] Statement Concerning Forward-Looking Information 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] - 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] - Investors are cautioned not to place undue reliance on forward-looking statements, and FICO disclaims any obligation to update them[7] Condensed Consolidated Financial Statements (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 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 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 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 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) 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) 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 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][17][20] - These measures exclude items such as amortization expense, share-based compensation expense, restructuring and acquisition-related items, excess tax benefit, and capital expenditures[16][17][20] - 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][17][20] Investor Information This section provides details for FICO's upcoming investor conference call and contact information for investor and analyst inquiries Conference Call Details 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] - Time: 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)[5] - Purpose: Report second quarter fiscal 2025 results and provide strategic and operational updates[5] - Access: FICO's website at www.fico.com/investors[5](index=5&type=chunk) 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] - Company: Fair Isaac Corporation[22] - Phone: (800) 459-7125[22] - Email: investor@fico.com[22]