Nov 19, 2025 2:09 PM Eastern Standard Time Cash App Score Pilot Launches Utilizing Near Real- time Data Share Providing select customers with insight on choices that impact their Cash App Score, and ultimately lending decisions Underwriting behind the Cash App Score uses live financial behavior to expand credit access DISTRIBUTED-WORK-MODEL/OAKLAND, Calif.--(BUSINESS WIRE)--Today Cash App, a part of Block, Inc. (NYSE: XYZ), announced a pilot program that gives select customers visibility into their Cash App ...

Core Thesis - Fair Isaac Corporation (FICO) is viewed positively due to its entrenched position in the U.S. financial system, driven by decades of innovation and strategic partnerships, particularly with major credit bureaus [2][3] Company Overview - FICO, founded in 1956, revolutionized credit scoring by introducing data-driven models, which replaced subjective lending judgments [2] - The company solidified its dominance in the mid-1990s when FICO scores became mandatory for mortgage purchases by Fannie Mae and Freddie Mac, creating a durable moat in the market [3] Financial Performance - In fiscal 2024, FICO reported revenues of $1.72 billion, with the Scores segment generating $920 million and the Software segment contributing $798 million [4] - The Scores business benefits from significant pricing power, with fees projected to increase from $0.50–$0.60 in 2022 to $4.95 in 2025 [4] - The Software segment, particularly the cloud-based FICO Platform, saw a 31% growth in Annual Recurring Revenue (ARR), indicating strong adoption of its analytics and decision-making tools [4] Market Position and Challenges - Despite strong fundamentals, FICO shares have declined by 37% from their all-time high due to increased competition from VantageScore, fee increases, and high valuation pressures [5] - The current market sentiment raises questions about valuation and near-term investment risks, positioning FICO as a high-quality business facing temporary headwinds [6] Investment Perspective - The bullish thesis on FICO remains intact, emphasizing its dominant market position and strong pricing power, despite a 22.41% depreciation in stock price since previous coverage [7]

Core Insights - Investors are reacting positively to Fair Isaac Corp.'s new pricing model for FICO scores, leading to a stock price increase of over 20% [1] - The new model allows mortgage lenders to calculate and distribute credit scores directly to borrowers, potentially saving them up to 50% on per-score FICO fees [1][3] - The change is seen as a response to calls for increased competition and lower prices in the mortgage lending market [3][4] Company Developments - Fair Isaac Corp. faced criticism from Bill Pulte, director of the Federal Housing Finance Agency, regarding a previous price hike for credit scores [4] - The company has introduced a direct licensing program, which was previously considered but not implemented until now [3][4] - The stock price surge follows a significant decline of nearly 41% over the past three months due to the criticism [5] Industry Context - The FICO score is utilized by 90% of top U.S. lenders to assess borrower creditworthiness [2] - The introduction of the new pricing model is expected to lead to lower costs in the mortgage lending system, benefiting consumers [4] - Pulte expressed appreciation for FICO's response to criticism, indicating a positive shift towards more competitive practices in the credit scoring market [6]

Core Insights - Fair Isaac, the creator of the FICO score, experienced a stock rally of over 20% following the announcement of a new pricing model that allows mortgage lenders to bypass credit bureaus for credit scores [1][2] - The new model enables mortgage resellers to license FICO scores directly from Fair Isaac, which can then be distributed to borrowers, potentially impacting the traditional role of credit bureaus [2][4] Company Developments - Fair Isaac's new pricing plan offers lenders a choice between two models, aimed at reducing unnecessary mark-ups on FICO Scores and providing more control to those making mortgage decisions [3] - The stock surge represents Fair Isaac's largest percentage increase since November 22, although shares are still down approximately 9% year-to-date [2] Industry Impact - Following Fair Isaac's announcement, shares of major credit bureaus—Experian, TransUnion, and Equifax—declined between 4% and 10%, indicating investor concerns about the diminished importance of these companies in the mortgage lending process [4] - Fair Isaac intends to offer its new mortgage score pricing models to the three credit bureaus under the same terms, which may further disrupt the existing market dynamics [4]

Group 1 - Fair Isaac Corporation (FICO) is a key player in the U.S. credit system, with its FICO score being the standard for lending decisions across major financial institutions [2][3] - The company generates over 60% of its revenue from its Scores segment, particularly from B2B business, while its Software segment contributes to growing recurring revenue [2] - FICO's strong market position is supported by network effects, high switching costs, and regulatory inertia, creating a significant competitive moat [3] Group 2 - FICO faces competitive pressure from VantageScore, which has gained approval for use in conforming mortgages, challenging FICO's market dominance [4] - In response, FICO has launched FICO Score 10 T, a model that enhances lenders' understanding of consumer risk, covering over $313 billion in annualized mortgage originations [4] - Financially, FICO reported a 20% year-over-year revenue increase to $536.4 million in Q3 2025, with GAAP EPS up 47% and non-GAAP EPS up 37%, driven by a 42% surge in B2B Scores revenue [5] Group 3 - Despite facing regulatory scrutiny and competitive challenges, FICO's entrenched position and pricing power continue to generate strong cash flows, presenting a long-term investment opportunity [5][6] - The stock has depreciated approximately 25.52% since previous coverage, but the bullish thesis remains valid due to FICO's intact competitive moat [6] - Darius Dark Investing emphasizes the strategic adoption of FICO Score 10 T as a response to regulatory and competitive pressures [6]

Core Business Strength - Fair Isaac's primary business, credit scoring, remains highly profitable, with over 90% of top U.S. lenders utilizing the FICO score, giving it near-monopoly status [4][6] - In Q3 2025, revenue from the scoring business grew by 34% year over year, with an impressive operating margin of 88%, indicating a strong business model [5][6] - The company benefits from significant pricing power, as lenders rely on FICO scores for risk assessments, making it difficult to switch to alternatives without facing compliance issues [6][7] Software Business Expansion - Fair Isaac is diversifying into software solutions, particularly through its cloud-based FICO Platform, which automates various financial decision-making processes [9][10] - The platform opportunity is still in early stages, with less than half of the top 300 global financial institutions currently engaged, suggesting substantial growth potential [10] - Traditional non-platform software continues to generate solid cash flow, with a gradual transition expected towards platform-based solutions as customer needs evolve [11] Global Market Opportunities - Fair Isaac is looking to expand its presence in emerging markets, where demand for credit analytics is increasing as consumer lending systems mature [12][13] - The company's scoring system can be quickly implemented in countries with incomplete credit data, allowing for expansion beyond mature markets [13] - With a long-term presence in 40 countries, Fair Isaac's global push could diversify revenue streams and reduce reliance on the U.S. credit cycle [14] Investment Implications - Fair Isaac is at a pivotal point, with its legacy FICO Score driving significant revenue while new analytics platforms and global expansion present additional growth opportunities [15] - Long-term investors may view Fair Isaac as a reliable earnings engine and an evolving growth business, making it a stock worth monitoring [15]

Financial Data and Key Metrics Changes - TransUnion exceeded all key financial guidance metrics for the sixth consecutive quarter, achieving high single-digit organic revenue growth of 9% on an organic constant currency basis, surpassing the 3% to 5% guidance [5][35] - Adjusted EBITDA increased by 8%, with an adjusted EBITDA margin of 35.7%, exceeding the guidance of 34.8% to 35.3% [36] - Adjusted diluted earnings per share rose to $1.08, a 9% increase and above the high end of guidance [36] Business Line Data and Key Metrics Changes - U.S. Market segment revenue grew by 10%, with Financial Services up 17% and 11% growth excluding mortgage [38] - Consumer lending and auto segments experienced double-digit growth, while card and banking grew in mid-single digits [6][38] - Emerging verticals grew by 5%, with insurance showing double-digit growth driven by recovery in marketing and consumer shopping activity [8][40] Market Data and Key Metrics Changes - The U.S. market segment delivered 10% growth, with robust activity from FinTech lenders and a 29% increase in mortgage revenue despite flat inquiries [6][39] - International revenue grew by 6% on an organic constant currency basis, with India showing an acceleration to 8% growth [8][42] - Canada and Africa also reported double-digit growth, while Asia Pacific declined by 8% due to lapping one-time consulting revenue [44] Company Strategy and Development Direction - The company is focused on execution and value creation, with an emphasis on product innovation and expanding its suite of solutions [57] - TransUnion aims to deepen penetration in core verticals, scale existing solutions, and broaden its product portfolio, particularly in Trusted Call Solutions [33][32] - The company is positioned to capitalize on significant growth opportunities in India, targeting over 20% annual growth in the medium term [15][109] Management's Comments on Operating Environment and Future Outlook - Management noted that the U.S. lending environment remains stable but muted, with consumer lending showing signs of recovery [12][82] - The company raised its full-year revenue and adjusted diluted earnings per share guidance, reflecting strong first-half results and continued business momentum [11][57] - Concerns about inflation and interest rates were acknowledged, but management remains optimistic about the resilience of consumers and lenders [12][13] Other Important Information - The leverage ratio declined to 2.8 times, with plans to deleverage to 2.5 times before the anticipated acquisition in Mexico [9][46] - The company has repurchased $47 million in shares year-to-date, aligning with its balanced approach to capital deployment [10][46] - One-time charges related to the transformation program totaled $29 million in the quarter, with a total of $315 million incurred to date [37] Q&A Session Summary Question: What is driving the outperformance across lending types? - Management indicated that a combination of customer mix and new technology/product innovation is driving the outperformance, particularly in consumer lending and FinTech [61][62] Question: What is the momentum for alternative data bureaus? - The momentum is attributed to re-platforming and innovation at Factor Trust, leading to increased business wins and a robust pipeline [67][70] Question: How is the Mexico acquisition performing? - The asset is performing well and is on plan, with the acquisition expected to close by the end of the year after clearing regulatory hurdles [72] Question: What are the initial learnings from the CI freemium rollout? - The rollout is progressing well, with expectations for mid-single-digit growth in the Consumer Interactive business as new offerings are integrated [74][78] Question: How is the consumer lending environment evolving? - The environment is stable but showing improvement, with consumer lending recovering and card activity becoming more optimistic [80][82] Question: What is the outlook for the mortgage market? - The mortgage market is at a bottom, with inquiries flat but revenue increasing due to pricing and pre-qualification traction [97][99] Question: What is the growth outlook for India? - India is expected to achieve a 10% growth rate for the full year, with potential for high teens growth in the fourth quarter as lending volumes recover [104][109]

Core Viewpoint - Fair Isaac Corporation (FICO) shares dropped nearly 17% following a regulatory announcement that Fannie Mae and Freddie Mac will now accept VantageScore 4.0 alongside traditional FICO scores for mortgage underwriting, challenging FICO's market dominance [2] Group 1: Market Reaction and Future Outlook - Despite the approval of VantageScore, it is expected that most lenders will continue to use FICO scores due to their established trust and integration with current underwriting frameworks [3] - The existing reliance on tri-merge credit reports, which aggregate data from all three major credit bureaus, continues to support demand for FICO's scoring products [3] Group 2: Financial Performance and Valuation - FICO's price-to-sales (P/S) ratio stands at 21.8x, significantly higher than the S&P 500's 3.1x, and its price-to-earnings (P/E) ratio is 71x compared to the benchmark's 26.9x, indicating a high valuation [4] - Fair Isaac's revenues have grown at an average rate of 10.3% over the past three years, with quarterly revenues increasing by 15.2% to $440 million, compared to a 4.8% increase for the S&P 500 [5] - The company's net income for the last four quarters was $544 million, resulting in a net income margin of 30.7%, well above the S&P 500 average of 11.6% [5] - Fair Isaac maintains a solid balance sheet with a Debt-to-Equity Ratio of 6.3% and a Cash-to-Assets Ratio of 10.8%, indicating strong financial health [5]

Core Viewpoint - Fair Isaac Corporation (FICO) shares fell 13.4% following comments from the Federal Housing Finance Agency (FHFA) Director Bill Pulte regarding the introduction of VantageScore 4.0 as a potential competitor to FICO's credit scoring monopoly [1][4]. Group 1: Market Dynamics - FICO has historically held a near-monopoly on credit scoring, allowing for significant price increases, the latest occurring in January [1]. - The FHFA's endorsement of VantageScore 4.0 for use by government-sponsored entities (GSEs) like Fannie Mae and Freddie Mac could lead to a reduction in FICO's market share, as these GSEs guarantee about half of all U.S. mortgages [2][4]. - VantageScore, developed in 2017, utilizes alternative data and less stringent traditional data requirements, potentially benefiting borrowers with limited credit history [3]. Group 2: Competitive Landscape - Despite the recent decline in FICO's stock, it still trades at a high valuation of 70 times earnings, indicating that investors do not anticipate significant declines in market share or revenue [6]. - The FHFA had previously mandated the use of VantageScore by Fannie Mae and Freddie Mac in late 2022, providing a three-year grace period for implementation, suggesting that the recent news may not be entirely new [7]. - The introduction of VantageScore could mitigate the risk of federal agencies moving towards a "bi-merge" scoring system, which would reduce the reliance on FICO scores [8]. Group 3: Pricing Strategy - FICO's recent price hikes, including the latest increase in January, may be halted as the new FHFA director aims to lower costs for homeowners [9].