FICO(US:FICO)2021-08-02 16:00Revenue Performance - Revenue increased 8% to $338.2 million for the quarter ended June 30, 2021, compared to $313.7 million for the same quarter in 2020[88]. - Scores revenue grew 31% to $172.2 million during the quarter ended June 30, 2021, up from $131.6 million in the same quarter of 2020[88]. - Total revenues for the quarter ended June 30, 2021, were $338.2 million, an increase of 8% compared to $313.7 million for the same period in 2020[106]. - For the nine months ended June 30, 2021, total revenues were $982.0 million, a 7% increase from $920.2 million in the same period of 2020[106]. - Scores segment revenues for the nine months increased by $109.7 million, with a 30% increase in transactional and maintenance revenue[115]. Income and Expenses - Operating income surged 135% to $194.4 million for the quarter ended June 30, 2021, compared to $82.9 million in the same quarter of 2020, primarily due to a gain from divesting the Collections and Recovery business[89]. - Net income rose 136% to $151.2 million for the quarter ended June 30, 2021, up from $64.1 million in the same quarter of 2020[89]. - Total operating expenses decreased to $143.8 million, down 38% from $230.9 million in the prior year quarter[120]. - Research and development expenses increased to $45.8 million, accounting for 14% of revenues, up from 13% in the prior year quarter[120][128]. - Selling, general and administrative expenses were $107.7 million, remaining at 32% of revenues, consistent with the prior year quarter[120][131]. Segment Performance - Applications segment revenues decreased by $8.2 million, primarily due to a $6.0 million decrease in services revenue and a $3.6 million decrease in license revenue[109]. - Scores segment revenues increased by $40.7 million, driven by a $22.0 million increase in business-to-business scores revenue and an $18.7 million increase in business-to-consumer services revenue[110]. - Decision Management Software segment revenues decreased by $8.0 million, mainly due to a $5.9 million decrease in license revenue and a $1.8 million decrease in services revenue[112]. - Total segment operating income for the quarter ended June 30, 2021, was $133,150, an increase of $26,967 or 25% compared to the same period in 2020[145]. - The Scores segment reported an operating income of $146,784 for the quarter, up $36,567 or 33% from $110,217 in the prior year[145]. Share Repurchase and Financing - The company repurchased approximately 489,000 shares at a total repurchase price of $246.0 million during the quarter ended June 30, 2021[90]. - The company repurchased approximately 1,031,000 shares of common stock at a total repurchase price of $501.2 million during the nine months ended June 30, 2021, with $225.3 million remaining under the March 2021 stock repurchase program[169]. - As of June 30, 2021, the company had $316.0 million in borrowings outstanding under a $400 million unsecured revolving line of credit at a weighted-average interest rate of 1.216%[171]. - The company issued $400 million of senior notes in May 2018 and $350 million in December 2019, with a total carrying value of $750.0 million as of June 30, 2021, and was in compliance with all financial covenants[172]. Cash Flow and Investments - Cash and cash equivalents as of June 30, 2021, totaled $237.6 million, including $186.4 million held by foreign subsidiaries[160]. - Operating activities generated $332,062 in cash for the nine months ended June 30, 2021, an increase of $103,332 from $228,730 in the prior year[162]. - Net cash provided by operating activities increased to $332.1 million for the nine months ended June 30, 2021, up from $228.7 million for the same period in 2020, reflecting a $103.3 million increase attributed to a $129.1 million rise in net income[164]. - Net cash provided by investing activities was $137.6 million for the nine months ended June 30, 2021, compared to net cash used of $23.3 million for the same period in 2020, marking a $160.9 million change primarily due to $146.4 million in cash proceeds from product line asset sales[165]. - Net cash used in financing activities rose to $394.6 million for the nine months ended June 30, 2021, from $183.5 million in the prior year, a $211.1 million increase mainly due to a $350.0 million decrease in proceeds from issuance of senior notes[166]. Strategic Initiatives - The company emphasized a strategic shift towards software over services, impacting revenue across multiple segments[109]. - The company plans to evaluate potential acquisitions or strategic relationships to enhance its business operations[161]. Tax and Compliance - The effective income tax rate for the quarter was 19.5%, compared to 15.9% in the same quarter of 2020[142]. - The company evaluates uncertain tax positions quarterly, with significant judgment required, and has historically not experienced material changes in its estimates[199]. - The company has not experienced significant changes in its valuation allowances or uncertain tax positions related to business combinations historically[191][196]. Market Risks - The company is exposed to market risks related to interest rates and foreign exchange rates, but does not use derivative financial instruments for speculative purposes[206]. - 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[211].