Fair Isaac Corporation (FICO)

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Fair Isaac (FICO)

Q4 2012 Earnings Call

November 01, 2012 5:00 pm ET


Steven P. Weber - Vice President of Investor Relations and Treasurer

William J. Lansing - Chief Executive Officer, President, Director and Member of Audit Committee

Michael J. Pung - Chief Financial Officer, Executive Vice President and Chief Investor Relations


Carter Malloy - Stephens Inc., Research Division

Ty M. Lilja - Feltl and Company, Inc., Research Division



Good evening. My name is Leticia, and I would like to welcome everyone to the Fair Isaac Corp. Fourth Quarter Earnings Call. [Operator Instructions] I would now like to turn the call over to today's host, Mr. Steve Webber. Mr. Weber, you may begin your conference.

Steven P. Weber

Thank you, Leticia. Good afternoon, and thank you for joining FICO's fourth quarter earnings call. I'm Steve Weber, Vice President of Investor Relations, and I'm joined today by our CEO, Will Lansing; and our CFO, Mike Pung.

Before we begin today, we'd like to offer our best wishes to those impacted by the recent hurricane. We know many of our employees, customers and partners have been directly impacted, and our thoughts are with you.

Today, we posted on the Investor Relations portion of the FICO website a copy of our news release, our Regulation G disclosure schedule and our financial highlights. While our press release describes financial results compared to the prior year, today, management will also discuss results in comparison to the prior quarter in order to facilitate understanding of the run rate of our business.

Certain statements made in this presentation may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many uncertainties that could cause actual results to differ materially. Information concerning these uncertainties is contained in the company's filings with the SEC, in particular, in the Risk Factors and Forward-Looking Statements portions of such filings. Copies are available from the SEC, from the FICO website or from our Investor Relations team.

In order to provide additional information to investors, we will use certain non-GAAP financial measures on this call. A reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures, entitled Regulation G Disclosure, is available on the Investor page of our website under the Presentations tab. A replay of this webcast will be available through December 1, 2012.

Now I'll turn the call over to Will Lansing.

William J. Lansing

Thanks, Steve. Today, we announced the results for our fourth quarter fiscal 2012. I'll briefly summarize those results, and then discuss some of the exciting things we've been working on and what they mean for the growth of the business.

I'm pleased to report we had a very strong finish to our fiscal year. Our revenue of $186 million was an increase of 16% over both the same period last year and the previous quarter. For the full fiscal year, revenues were $676 million, up 9% from the previous year. We delivered $21 million of net income and earnings of $0.60 for the quarter, which include $0.09 per share of one-time charges taken in the quarter and $92 million of net income and $2.55 EPS for the year.

We saw revenue growth throughout our portfolio and across all regions, both in the fourth quarter and for the fiscal year in total. Our Applications business was up 23% versus the same quarter last year, and full year revenue was up 11% over the previous year. Tools were up 9% versus the same quarter last year, and full revenue was up 12% over the previous year. Scores also had a good year, with both the quarter and full year up 4% versus the previous year.

Geographically, our Americas region was up 13% this quarter versus prior year quarter and 8% for the full year. APAC was up 12% this quarter versus the prior year and 9% for the full year. And we're very pleased with our EMEA region, where this quarter's 2011 were 33% higher than the same quarter last year, and the full year revenues were 13% higher this year than last. These numbers are a testament not only to our strong execution, but also the resilience of our products, even in unsure economic times.

I would add these results included about one month of contributions from our acquisition of Adeptra during the quarter. Mike will provide more details as he looks at the numbers. But I'd like to first talk about how well that integration is going, and how we are building a strong growth engine at FICO.

I'm delighted with the progress that's already been made in bringing Adeptra and FICO together. This has been an easy integration, as both cultures and technologies have come together well. We are putting several members of our Adeptra senior management team into key roles at FICO, with their helping not only with the integration, but adding valuable leadership. And I'm hearing great things from the field that reinforced the beliefs we've had when we were evaluating the transaction.

At the recent annual sales meeting, there's a genuine buzz about the pipeline of opportunities for Adeptra. I heard again and again how customers are excited with what many view as a natural extension to our existing product set and how our salespeople have another best-in-class product available to sell immediately.

Both the Adeptra and Entiera acquisitions helped us in 2 strategically important areas. First, we believe Adeptra gives us valuable opportunities to diversify from our base and financial services by taking our core competencies to other vertical industries. Entiera strengthens our position in the retail space and Adeptra, in addition to its application and financial services, helps us in telecom, retail and other industries looking to improve customer engagement. These are industries where analytics-based products can generate great value, and we aim to build our business in them as a compliment to our strong financial services foundation.

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