Financial Data and Key Metrics Changes - The company reported Q1 revenues of $512 million, up 16% year-over-year [6] - GAAP net income was $158 million, an increase of 4%, with GAAP earnings of $6.61 per share, up 8% from the prior year [6] - Non-GAAP net income reached $176 million, up 22%, and non-GAAP earnings were $7.33 per share, up 27% [6] - Free cash flow for Q1 was $165 million, with a total of $718 million in free cash flow over the last four quarters, a 7% increase year-over-year [7] Business Line Data and Key Metrics Changes - Scores segment revenues were $305 million, up 29% year-over-year, driven by B2B scores growth [7][16] - B2B revenues increased by 36%, primarily due to higher mortgage origination scores unit price and increased volume [16] - Software segment revenues were $207 million, up 2% year-over-year, with platform revenue growth of 37% and a 13% decline in non-platform revenue [7][19] Market Data and Key Metrics Changes - 88% of total company revenues came from the Americas region, while EMEA generated 8% and Asia Pacific delivered 4% [20] - Mortgage originations revenues were up 60% year-over-year, accounting for 51% of B2B revenue and 42% of total scores revenue [16] Company Strategy and Development Direction - The company is focused on expanding its FICO Mortgage Direct Licensing Program and enhancing the FICO Score 10 T for better credit risk assessment [9][10] - The strategy includes broadening reach beyond financial services into other verticals, leveraging partnerships and the new platform [52] - The company aims to empower customers with real-time insights and decision-making capabilities through its next-generation platform [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding fiscal year guidance, citing strong execution in the scores business and software bookings growth [24] - The macroeconomic environment remains uncertain, influencing the decision not to raise guidance at this time [32] - The company anticipates continued growth in mortgage revenues driven by price, volume, and refinancing activity [85] Other Important Information - The company repurchased 95,000 shares for a total cost of $163 million in Q1, viewing share repurchases as an attractive use of cash [23] - The effective tax rate for the quarter was 17.5%, with an expected full-year net effective tax rate of 24% [22] Q&A Session Summary Question: Significance of LoanPass and timing for Ten T approval - Management noted ongoing adoption on the non-conforming side but could not provide a specific timeline for Ten T's general availability [30] Question: Timeline for LLPA grids - Management indicated that no one knows the timeline for LLPA grids due to challenges in implementation [35] Question: Concerns regarding FICO Direct and performance model - Management addressed concerns about score calculation accuracy, stating that resellers will use the same algorithm as bureaus [38] Question: Timeline for direct license program resellers going live - Management could not provide a specific timeline but assured that integration testing is ongoing [42] Question: Revenue model for performance model vs. per score model - Management clarified that the performance model is optional, allowing flexibility for lenders [45] Question: Trends in software business and investment cycle - Management confirmed ongoing investments in the software business, anticipating margin expansion from increased volume and customer adoption [99]

Financial Data and Key Metrics Changes - The company reported Q1 revenues of $512 million, up 16% year-over-year [4] - GAAP net income for the quarter was $158 million, an increase of 4%, with GAAP earnings of $6.61 per share, up 8% from the prior year [4] - Non-GAAP net income was $176 million, up 22%, with non-GAAP earnings of $7.33 per share, up 27% year-over-year [4] - Free cash flow for Q1 was $165 million, with a total of $718 million in free cash flow over the last four quarters, a 7% increase year-over-year [5] Business Line Data and Key Metrics Changes - Scores segment revenues were $305 million, up 29% year-over-year, driven by B2B scores growth [5][13] - B2B revenues increased by 36%, primarily due to higher mortgage origination scores unit price and increased volume [13] - B2C revenues grew by 5%, mainly from indirect channel partners [13] - Software segment revenues were $207 million, up 2% from the prior year, with platform revenue growth of 37% and a 13% decline in non-platform revenue [5][17] Market Data and Key Metrics Changes - 88% of total company revenues came from the Americas region, while EMEA generated 8% and Asia Pacific delivered 4% [18] - Mortgage originations revenues were up 60% year-over-year, accounting for 51% of B2B revenue and 42% of total scores revenue [13] - Auto originations revenues increased by 21%, while credit card, personal loan, and other originations revenues rose by 10% year-over-year [14] Company Strategy and Development Direction - The company is focused on expanding its FICO Mortgage Direct Licensing Program and enhancing the FICO Score 10 T, which is expected to be available for direct licensing in the first half of 2026 [6][7] - The strategy emphasizes empowering customers with real-time insights and decision-making capabilities, with a commitment to innovation and customer engagement [11] - The company aims to broaden its reach beyond financial services, targeting other verticals while maintaining a strong focus on its core market [48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding fiscal year guidance, citing strong execution in the scores business and growth in software bookings and ARR [21] - The macroeconomic environment remains uncertain, influencing the decision not to raise guidance at this time [29][30] - Management highlighted the importance of ongoing testing and integration for new products, particularly in the mortgage market [39] Other Important Information - The company repurchased 95,000 shares for a total cost of $163 million in Q1, viewing share repurchases as an attractive use of cash [20] - The effective tax rate for the quarter was 17.5%, with an expected full-year net effective tax rate of 24% [19] Q&A Session Summary Question: Significance of the Ten T and timing for approval - Management noted ongoing adoption on the non-conforming side but could not provide a specific timeline for general availability [26][27] Question: Concerns regarding FICO Direct and performance model - Management addressed concerns about score calculation accuracy, stating that resellers will use the same algorithm and technology as the bureaus [33][34] Question: Timeline for LLPA grids - Management indicated that no one knows the timeline for LLPA grids, citing challenges with gaming and adverse selection issues [32][34] Question: Mortgage revenue growth drivers - Management confirmed that revenue growth was driven by a combination of price, volume, and refinancing activity [78] Question: Software business investment cycle - Management stated that they continue to invest in the software business and anticipate margin expansion as the new platform scales profitably [96]

Brown Advisory, an investment management company, released its “Brown Advisory Large-Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Brown Advisory Large-Cap Growth strategy has shown resilience this year amid heightened volatility, protecting investor capital during market declines and participating in the strong rebound since early April. The strategy returned 16% during the second quarter, slightly underperforming the benchmark, the Russell 1000® ...