FICO(US:FICO)2025-11-07 21:02Financial Performance - As of September 30, 2025, annual recurring revenue (ARR) from FICO Platform-based products was $263.6 million, representing 35% of total software ARR[32] - The largest market segment for FICO is financial services, accounting for 92% of total revenue during fiscal 2025[42] - The Americas represent 87% of FICO's total revenue during fiscal 2025[42] - Revenues from agreements with Experian, TransUnion, and Equifax accounted for 51% of total revenues in fiscal 2025, up from 41% in fiscal 2023[41] Product and Service Offerings - FICO's professional services are sold on an hourly basis or for a fixed project fee, contributing to overall revenue growth[37] - FICO's Fraud Solutions leverage a global dataset from over 10,000 institutions to enhance fraud detection capabilities[38] - FICO aims to move substantially all current software products onto the FICO Platform, driving additional subscription revenue over time[32] - FICO's consumer solutions are marketed to over 200 million U.S. consumers whose credit relationships are reported to major consumer reporting agencies[40] - FICO's software offerings are sold both individually and as integrated bundles, enhancing customer engagement and business results[33] Intellectual Property - FICO held 204 U.S. and 26 foreign patents as of September 30, 2025, with 79 applications pending[53] Workforce and Employee Engagement - As of September 30, 2025, the company employed 3,811 persons across 28 countries, with 1,335 (35%) in the U.S., 1,506 (40%) in India, and 271 (7%) in the U.K.[74] - The company has conducted quarterly workforce surveys for the past decade to measure employee engagement, with all 22 engagement driver scores at or above external benchmark scores[79] - The company has expanded its benefit programs, including paid parental leave and childcare reimbursement, in response to employee feedback from surveys[78] - The percentage of racially/ethnically diverse employees in the U.S. workforce as of September 30, 2025, was 46%[82] - The company has significantly strengthened its position as an employer of choice, resulting in attractive external candidate pools and a remarkably low undesired attrition rate[84] - Approximately 25% of the company's employees are recognized via promotion each year, reflecting a structured promotion process[88] - The company has expanded participation in its annual performance-based equity program from 7% to just over 33% of its workforce over the past decade[93] - The company offers competitive health and welfare benefit plans, including paid maternity and parental leave benefits totaling up to 12 weeks[94] - The company conducts annual company-wide performance reviews supported by performance rubrics to ensure consistent administration[87] - The company has a structured onboarding program and invests in the FICO Integrated Learning Organization to support professional development[85] - The company regularly participates in market-based compensation surveys to ensure competitive base pay and incentive structures[91] Financial Position - As of September 30, 2025, the company reported cash and cash equivalents of $134.136 million with an average yield of 1.77%, down from $150.667 million and 2.88% in the previous year[271] - The company has a total of $2.8 billion in Senior Notes, with fair values of $2.7935 billion as of September 30, 2025, compared to $1.2635 billion in the previous year[271] - The company has $275 million in borrowings outstanding under its revolving line of credit at a weighted-average interest rate of 5.423% as of September 30, 2025[272] Regulatory Compliance - The California Consumer Privacy Rights Act (CPRA) revised and expanded the scope of the California Consumer Privacy Act (CCPA) effective January 1, 2023[60] - The EU AI Act, which establishes requirements for AI systems, will take effect between six and 36 months after its entry into force on August 1, 2024[70] - The Dodd-Frank Act provides the Consumer Financial Protection Bureau (CFPB) with authority to enforce provisions against unfair, deceptive, or abusive acts in consumer financial products[63] - The Gramm-Leach-Bliley Act (GLBA) imposes obligations on the company to comply with certain provisions regarding the security of non-public personal information[61] - The company is subject to various federal and state laws applicable to U.S. businesses, including antitrust laws and the Foreign Corrupt Practices Act[72] Foreign Currency Management - The company maintains a program to manage foreign exchange rate risk through forward contracts, with all contracts having maturity periods of less than three months[273] - As of September 30, 2025, the company has foreign currency forward contracts with a total contract amount of €7,700,000 for Euro, £10,019,000 for British Pound, and S$8,087,000 for Singapore Dollar[274] - The fair value of the Euro contracts as of September 30, 2025, is $9,034,000, while the British Pound contracts have a fair value of $13,500,000, and the Singapore Dollar contracts are valued at $6,300,000[274] - In comparison, as of September 30, 2024, the company had Euro contracts amounting to €13,000,000 with a fair value of $14,531,000, British Pound contracts of £12,237,000 valued at $16,400,000, and Singapore Dollar contracts of S$7,404,000 with a fair value of $5,800,000[274] - The total contract amount for Euro contracts decreased by 40% from 2024 to 2025[274] - The British Pound contract amount decreased by approximately 18% from 2024 to 2025[274] - The Singapore Dollar contract amount increased by approximately 9% from 2024 to 2025[274] - The fair value of Euro contracts decreased by approximately 38% from 2024 to 2025[274] - The fair value of British Pound contracts decreased by approximately 18% from 2024 to 2025[274] - The fair value of Singapore Dollar contracts increased by approximately 9% from 2024 to 2025[274] - The foreign currency forward contracts were entered into on September 30, 2025, and 2024, resulting in a fair value of $0 at each of these dates[274]