Financial Data and Key Metrics Changes - The company reported Q4 revenues of $516 million, up 14% year-over-year, and for the full fiscal year, revenues reached $1.991 billion, an increase of 16% compared to the prior year [6][22] - GAAP net income for the quarter was $155 million, up 14%, with GAAP earnings of $6.42 per share, an 18% increase from the prior year [28][29] - Non-GAAP net income for the quarter was $187 million, up 15%, with non-GAAP earnings per share of $7.74, an 18% increase year-over-year [29] - Free cash flow for the quarter was $211 million, with a total of $739 million over the last four quarters, representing a 22% year-over-year increase [30] Business Line Data and Key Metrics Changes - In the software segment, Q4 revenues were $204 million, flat year-over-year, while for the fiscal year, revenues were $822 million, up 3% from last year [7][22] - The scores segment saw Q4 revenues of $312 million, up 25% year-over-year, driven primarily by B2B scores, which increased by 29% [9][23] - Total scores revenues for the fiscal year were $1.169 billion, up 27%, with mortgage origination revenues up 52% year-over-year [23] Market Data and Key Metrics Changes - The Americas region accounted for 87% of total company revenues, while EMEA generated 8% and Asia-Pacific delivered 5% [22] - The company anticipates no significant improvement in the macro environment for its Scores business, with expectations of stable market share and volume in auto, card, and personal loan originations [24] Company Strategy and Development Direction - The company plans to advance its direct and indirect distribution strategy and invest to capture market opportunities emerging from innovations like the FICO Platform and FICO FFM [9][24] - The FICO Mortgage Direct License Program aims to drive competition and transparency in the mortgage market, with significant interest from resellers and lenders [12][13] - The company maintains a focus on efficiencies and prioritizes resources for strategic initiatives, including headcount for distribution and development of the FICO Platform [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stronger growth in fiscal 2026, guiding for revenues of $2.35 billion, a 18% increase over fiscal 2025 [33] - The company is being conservative in its guidance due to uncertainties in the macro environment, particularly regarding mortgage volumes and interest rates [72] - Management highlighted the importance of maintaining a competitive edge through innovations and the value provided by FICO scores [45][56] Other Important Information - The company has a patent portfolio of over 230 issued patents and nearly 80 pending applications, reinforcing its position in responsible AI development [9] - The effective tax rate for the quarter was 23.4%, with a full-year net effective tax rate of 18.8% [29][30] Q&A Session Summary Question: Feedback from FHFA and FICO 10T approval timeline - Management confirmed constructive conversations with the FHFA and expressed confidence in the eventual release of FICO 10T [36] Question: Assumptions around direct licensing model in guidance - Management indicated a conservative approach in guidance due to uncertainties in the macro environment and potential timing issues with the performance model [39][40] Question: Long-term pricing strategy - Management stated that while they recognize a value gap, specific pricing strategies for 2027 and beyond are not yet determined [44][45] Question: Feedback from lenders on pricing models - Positive reception to the direct model was reported, with lenders appreciating the optionality provided by the two pricing models [49] Question: Adoption of FICO 10T in the non-conforming market - Management noted that lenders in the non-conforming market prioritize default risk and are satisfied with the performance of FICO 10T [53] Question: Mortgage volume assumptions in guidance - Management acknowledged conservatism in guidance due to uncertainties around interest rates and trigger leads [72] Question: Reseller adoption of the direct model - Management confirmed that resellers are on pace for adoption, with no significant operational hurdles anticipated [82] Question: Credit bureaus and performance model availability - Management indicated uncertainty regarding the split between the per-score and performance models among lenders [85]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported revenues of $516 million, a 14% increase year-over-year, and for the full fiscal year, revenues reached $1.991 billion, up 16% compared to the prior year [4][21] - The company achieved record annual free cash flow, with Q4 free cash flow of $211 million and total free cash flow of $739 million over the last four quarters, representing a 22% year-over-year increase [28][29] - GAAP net income for Q4 was $155 million, up 14%, with GAAP earnings per share of $6.42, an 18% increase from the prior year [26][27] Business Line Data and Key Metrics Changes - In the software segment, Q4 revenues were $204 million, flat year-over-year, while for the full fiscal year, revenues were $822 million, up 3% [5][21] - The scores segment saw Q4 revenues of $312 million, a 25% increase year-over-year, driven primarily by B2B scores, which were up 29% [8][22] - For the full year, scores revenues totaled $1.169 billion, up 27%, with mortgage origination revenues up 52% in Q4 [22] Market Data and Key Metrics Changes - The Americas region accounted for 87% of total company revenues, while EMEA generated 8% and Asia-Pacific delivered 5% [21] - The company reported a dollar-based net retention rate of 102% for the quarter, with platform NRR at 112% and non-platform NRR at 97% [24] Company Strategy and Development Direction - The company plans to advance its direct and indirect distribution strategy and invest to capture market opportunities emerging from innovations like the FICO Platform and FICO FFM [8][30] - The FICO Mortgage Direct License Program aims to drive competition and transparency in the mortgage market, with significant interest from resellers and lenders [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stronger growth in fiscal 2026, guiding for revenues of $2.35 billion, a projected 18% increase over fiscal 2025 [30] - The company remains conservative in its guidance due to uncertainties in the macro environment, particularly regarding mortgage volumes and interest rates [50][51] Other Important Information - The company has a patent portfolio of over 230 issued patents, with many related to AI, reinforcing its position in responsible AI development [8] - Total debt at the end of the quarter was $3.06 billion, with a weighted average interest rate of 5.27% [28] Q&A Session Summary Question: What are the recent discussions with the FHFA regarding FICO 10T? - Management confirmed constructive conversations with the FHFA and expressed confidence in the eventual release of FICO 10T [31] Question: Can you clarify the assumptions around the direct licensing model in the guidance? - Management indicated a conservative approach due to uncertainties in the macro environment and potential timing issues with the performance model [32][34] Question: What feedback have you received from lenders regarding the pricing models? - Positive reception to the direct model was reported, with lenders appreciating the optionality provided by the two pricing models [37][38] Question: How do you view the adoption of FICO 10T in the non-conforming market? - Management noted strong interest and satisfaction among lenders regarding the predictiveness of FICO 10T, although adoption processes can be slow [39][40] Question: What is the outlook for mortgage volume in your guidance? - The company remains conservative in its assumptions, with mortgage volumes expected to vary primarily with interest rates [50][51]