FICO(US:FICO)2026-01-28 23:02Financial 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] - Software ACV bookings for the quarter were a record $38 million, with trailing 12-month ACV bookings reaching $119 million, a 36% increase [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% [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 10T for better predictive accuracy [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 connected decisions throughout the customer lifecycle [14] Management's Comments on Operating Environment and Future Outlook - Management reiterated fiscal 2026 guidance, expressing confidence in exceeding it based on strong execution and market demand [6][24] - The macro environment remains uncertain, influencing the decision not to raise guidance at this time [32] - The company is optimistic about the adoption of new products and innovations, particularly in the mortgage and software segments [24][106] 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 the 10T and timing for approval - Management noted ongoing adoption on the non-conforming side but could not provide a specific timeline for general availability [30] 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 LLPA grids - Management indicated that no one knows the timeline for LLPA grids, citing challenges in making them work effectively [35] Question: Mortgage revenue growth drivers - Management confirmed that growth was driven by a combination of price, volume, and refinancing activity [85] Question: Trends in software business and customer engagement - Management highlighted strong growth in platform ARR and ongoing efforts to migrate customers to the new platform [62]