Fair Isaac (FICO) Up 4.9% Since Last Earnings Report: Can It Continue?

Core Insights - Fair Isaac reported strong Q3 fiscal 2025 results, with non-GAAP earnings of $8.57 per share, exceeding estimates by 10.87% and showing a year-over-year increase of 37.1% [2] - Revenues reached $536.4 million, surpassing consensus by 3.4% and reflecting a 19.8% year-over-year growth [2] - The company continues to enhance its product offerings, including the launch of FICO Score10 BNPL models, which integrate Buy-Now-Pay-Later data into credit scoring [7] Financial Performance - Software revenues increased by 2.8% year over year to $212.1 million, with software annual recurring revenues (ARR) growing by 4% [3][4] - The adjusted EBITDA rose by 31.9% year over year to $312.3 million, with an adjusted EBITDA margin of 58.2% compared to 52.9% in the previous year [8] - Cash flow from operations was $286.2 million, up from $213.3 million in the prior-year period, and free cash flow increased to $276.2 million from $205.7 million [9][10] Revenue Breakdown - Scores, which account for 60.5% of total revenues, increased by 34.3% year over year to $324.3 million [2] - B2B scoring solutions saw a 42% year-over-year revenue increase, while B2C revenues grew by 6% [5] - Mortgage-originations revenues surged by 53% year over year, and auto-originations revenues increased by 23% [6] Guidance and Market Position - For fiscal 2025, Fair Isaac anticipates revenues of $1.98 billion and non-GAAP earnings of $29.15 per share [11] - Despite recent strong performance, there has been a downward trend in estimates, with a consensus estimate shift of -7.19% [12] - The company holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [14]