FICO(FICO) - 2025 Q3 - Quarterly Results

Financial Highlights Q3 Fiscal 2025 Performance Overview FICO reported strong Q3 fiscal 2025 results, with total revenue increasing 20% to $536.4 million, and significant growth in GAAP and Non-GAAP net income and EPS driven by the Scores segment Q3 FY2025 GAAP Financial Highlights (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue ($ million) | $536.4 | $447.8 | +20% | | Net Income ($ million) | $181.8 | $126.3 | +44% | | Diluted EPS ($) | $7.40 | $5.05 | +46.5% | | Net Cash from Operating Activities ($ million) | $286.2 | $213.3 | +34.2% | Q3 FY2025 Non-GAAP Financial Highlights (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Non-GAAP Net Income ($ million) | $210.6 | $156.4 | +34.7% | | Non-GAAP EPS ($) | $8.57 | $6.25 | +37.1% | | Free Cash Flow ($ million) | $276.2 | $205.7 | +34.3% | Segment Performance Revenue growth was primarily driven by the Scores segment's 34% increase, with the Software segment showing modest 3% growth supported by SaaS and platform ARR Q3 FY2025 Revenue by Segment (vs. Q3 FY2024) | Segment | Q3 FY2025 Revenue ($ million) | Q3 FY2024 Revenue ($ million) | Growth | | :--- | :--- | :--- | :--- | | Scores | $324.3 | $241.4 | +34% | | Software | $212.1 | $206.4 | +3% | - Scores segment B2B revenue increased 42% due to higher unit prices, increased mortgage origination volume, and a US insurance score license renewal, while B2C revenue grew 6% from indirect channel partners[4] - Software segment growth was supported by an 18% increase in platform Annual Recurring Revenue (ARR) and a platform software Dollar-Based Net Retention Rate of 115%[4] Fiscal 2025 Outlook Updated Full-Year Guidance FICO raised its full-year fiscal 2025 GAAP and Non-GAAP Net Income and EPS guidance, while revenue guidance remains unchanged at $1.98 billion Updated Fiscal 2025 Guidance | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | Revenues | $1.98 billion | $1.98 billion | | GAAP Net Income | $624 million | $630 million | | GAAP EPS | $25.05 | $25.60 | | Non-GAAP Net Income | $712 million | $718 million | | Non-GAAP EPS | $28.58 | $29.15 | Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $1.86 billion, while total liabilities rose to $3.26 billion, resulting in a $1.40 billion stockholders' deficit Key Balance Sheet Items (in thousands) | Account | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--- | :--- | :--- | | Total current assets | $709,844 | $617,413 | | Total assets | $1,862,023 | $1,717,884 | | Total current liabilities | $770,608 | $380,285 | | Total liabilities | $3,259,469 | $2,680,563 | | Stockholders' deficit | $(1,397,446) | $(962,679) | Condensed Consolidated Statements of Income Q3 2025 total revenues increased 20% to $536.4 million, with operating income reaching $262.5 million and net income $181.8 million, or $7.40 per diluted share Q3 Income Statement Highlights (in thousands, except per share data) | Metric | Quarter Ended June 30, 2025 (in thousands) | Quarter Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Total revenues | $536,415 | $447,849 | | Operating income | $262,518 | $190,251 | | Net income | $181,789 | $126,256 | | Diluted EPS | $7.40 | $5.05 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities for the nine months ended June 30, 2025, was $555.1 million, with $486.8 million used in financing activities, primarily for stock repurchases Cash Flow Summary for Nine Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $555,138 | $406,486 | | Net cash used in investing activities | $(30,390) | $(20,434) | | Net cash used in financing activities | $(486,792) | $(364,981) | | Increase in cash and cash equivalents | $38,382 | $19,265 | Non-GAAP Financial Measures Reconciliation of GAAP to Non-GAAP Results Q3 2025 GAAP net income of $181.8 million was adjusted to $210.6 million Non-GAAP net income, primarily by adding back $41.9 million in share-based compensation Q3 2025 GAAP to Non-GAAP Reconciliation (in thousands, except per share data) | Metric | GAAP (in thousands) | Adjustments (in thousands) | Non-GAAP (in thousands) | | :--- | :--- | :--- | :--- | | Net Income | $181,789 | $28,762 | $210,551 | | Diluted EPS | $7.40 | $1.17 | $8.57 | Reconciliation of Non-GAAP Guidance Updated fiscal 2025 guidance reconciles GAAP net income of $630 million to Non-GAAP net income of $718 million, primarily adjusting for $170 million in share-based compensation Updated FY2025 Guidance Reconciliation (in millions, except per share data) | Metric | GAAP Guidance (in millions) | Adjustments (in millions) | Non-GAAP Guidance (in millions) | | :--- | :--- | :--- | :--- | | Net Income | $630 | $88 | $718 | | Diluted EPS | $25.60 | $3.55 | $29.15 | Explanation of Non-GAAP Measures Management uses non-GAAP measures like non-GAAP net income and free cash flow to provide supplemental performance information and enhance transparency into recurring business results - Management uses non-GAAP measures for financial and operational decision-making and to evaluate period-to-period comparisons[18][22] - These measures exclude items that may not be indicative of recurring business results, such as share-based compensation, amortization of intangibles, and certain tax items[17][21]