FICO(US:FICO)2022-04-27 22:42Financial Data and Key Metrics Changes - The company reported revenues of $357 million, an increase of 8% year-over-year [8] - GAAP net income was $104 million, up 52%, with GAAP earnings per share of $3.95, reflecting a 70% increase [8][21] - Non-GAAP net income reached $124 million, a 37% increase, with non-GAAP earnings per share of $4.68, up 53% from the previous year [8][22] - Total operating expenses decreased to $205 million from $230 million year-over-year, primarily due to the divestiture of the Collections and Recovery business [20] Business Line Data and Key Metrics Changes - In the Scores segment, revenues were $184 million, up 9% year-over-year, with B2B Scores revenue increasing by 5% [14] - Mortgage origination revenues declined by 23%, accounting for about 14% of Scores revenues and 7% of total company revenues [9] - Auto origination revenues increased by 9%, while personal loan origination revenues rose by 27% [10] - Software segment revenues were $173 million, up 7% year-over-year, with total ARR increasing by 11% and platform ARR growing by 60% [11][18] Market Data and Key Metrics Changes - The Americas region generated 78% of total revenues, while Asia-Pacific contributed 12% and EMEA accounted for 10% [17] - The dollar-based net retention rate for the quarter was 110%, with platform software at 141% [12][19] Company Strategy and Development Direction - The company is focused on diversifying its revenue streams across different credit verticals to mitigate risks associated with rising interest rates [26] - There is a commitment to continue delivering strong growth in the software segment, with a focus on enhancing product efficiency and cost management [27] - The company raised its full-year revenue guidance to $1.355 billion, reflecting strong growth in unsecured lending markets and software [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by a volatile macro environment but expressed confidence in the company's diversified business model [26] - The company anticipates higher expenses in the second half of the year but is managing costs effectively [31] - There is uncertainty in the mortgage market, but growth is expected in other lending categories [28][50] Other Important Information - Free cash flow for the quarter was $120 million, down from $152 million in the same period last year [23] - The company repurchased 580,000 shares at an average price of $455 per share, with a new $500 million repurchase authorization approved [24] Q&A Session Summary Question: How is the company managing costs amid inflation dynamics? - Management indicated that expenses will be higher in the second half but are currently well-managed, with cost control measures in place [31][32] Question: Can you elaborate on the dynamics between pricing benefits and volume assumptions? - Management noted that while some volumes are down, pricing increases are offsetting these declines [34] Question: What is the breakdown of the diversified lending categories? - Management stated that mortgage, auto, and personal loans are roughly the same size in terms of B2B originations [35][36] Question: How has customer receptivity been to price increases? - Management reported that while customers prefer not to have price increases, they expect reasonable increases, which have been well received [41][42] Question: What changes have occurred in expectations for auto and personal loans? - Management indicated that expectations for auto credit originations have been adjusted downward due to supply chain issues, while personal loans remain stable [49] Question: Does the guidance assume a similar decline in mortgage inquiries as reported by bureau partners? - Management confirmed that the guidance does assume a similar decline in mortgage inquiries [51] Question: How has the adjusted net income guidance increased relative to revenue guidance? - Management explained that lower travel and entertainment costs, reduced COGS for SaaS products, and slower hiring contributed to the adjusted net income guidance increase [56]