Fair Isaac FICO reported fourth-quarter fiscal 2024 earnings of $6.54 per share, which missed the Zacks Consensus Estimate by 0.91% but rose 30.5% year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Revenues of $454 million increased 16.4% on a year-over-year basis but lagged the consensus mark by 0.21%. Americas, EMEA and Asia Pacific contributed 85%, 10% and 5% to total revenues, respectively.
FICO raised its FY25 guidance following the robust fiscal fourth-quarter performance, which bodes well for investors. FICO shares have appreciated 79.6% year to date, outperforming the Zacks Computer & Technology sector’s return of 25.1%.
Fair Isaac Corporation Price, Consensus and EPS Surprise
Fair Isaac Corporation price-consensus-eps-surprise-chart | Fair Isaac Corporation Quote
FICO’s Top-Line Details
Software revenues, which include Fair Isaac’s analytics and digital decisioning technology, as well as associated professional services, increased 5.4% year over year to $204.6 million.
Software Annual Recurring Revenues (ARR) increased 8% year over year, consisting of 31% platform ARR growth and no growth in non-platform. Software Dollar-Based Net Retention Rate was 106% in the fiscal fourth quarter, with platform software at 123% and non-platform software at 99%.
On-premises and SaaS Software (40% of revenues) increased 7.5% year over year to $181.7 million. Professional services (5% of revenues) were $22.9 million, down 9.1% year over year.
Scores (54.9% of revenues) increased 27.4% year over year to $249.2 million. Scores include FICO’s business-to-business (B2B) scoring solutions and business-to-consumer (B2C) scoring solutions.
B2B revenues increased 38% year over year, driven primarily by higher unit prices. B2C revenues dropped 1% year over year due to lower volumes on myFICO.com business.
Mortgage originations revenues surged 95% year over year. It accounted for 47% of B2B revenues and 37% of total scores revenues. Auto originations revenues decreased 2% year over year. Credit card and personal loan revenues declined 5% year over year.
In the fourth quarter of fiscal 2024, FICO experienced continued customer adoption, particularly for FICO Score 10 T in mortgage origination. The company also signed new customers and increased adoption from existing ones, enhancing its leadership in the mortgage industry.
FICO also secured two important platform partnerships with Tata Consulting Services and iSON Xperiences. These partnerships will help FICO expand its platform business and reach more customers.
FICO’s Operating Details
Research & development expenses, as a percentage of revenues, contracted 90 basis points (bps) on a year-over-year basis to 9.7%.
Selling, general and administrative expenses, as a percentage of revenues, increased 160 bps year over year to 27.1%.
Operating margin was 43.4% in the reported quarter, expanding 90 bps year over year.
FICO’s Balance Sheet & Cash Flow
As of Sept. 30, 2024, FICO had $151 million in cash and cash equivalents and total debt was $2.2 billion. In comparison, as of June 30, 2024, FICO had $156 million in cash and cash equivalents and total debt of $2.1 billion.
Cash flow from operations was $226.4 million in the fiscal fourth quarter compared with $213.3 million in the previous quarter. Free cash flow was $219.4 million compared with $205.7 million reported in the prior quarter.
In the fiscal fourth quarter, FICO repurchased 188K shares.
FICO Initiated FY25 Guidance
For fiscal 2025, FICO anticipates revenues of $1.98 billion.
Non-GAAP earnings are projected to be $28.58 per share.
FICO’s Zacks Rank & Other Stocks to Consider
Currently, FICO has a Zacks Rank #2 (Buy).
Shopify SHOP, BiliBili BILI and NVIDIA NVDA are some other top-ranked stocks that investors can consider in the broader sector. While SHOP sports Zacks Rank #1 (Strong Buy) BILI and NVIDIA carry Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify shares have risen 4.9% year to date. SHOP is set to report its third-quarter 2024 results on Nov. 12.
Bilibili shares have gained 82% year to date. BILI is set to report its third-quarter 2024 results on Nov. 14.
NVIDIA shares have gained 194% year to date. NVDA is set to report its third-quarter fiscal 2025 results on Nov. 20.
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