FICO Earning Date, Transcript Summary & Report

Quarter Two Revenue Increase: Quarter two revenues of $499 million, up 15% over last year.

Net Income Increase: GAAP net income of $163 million, up 25% from the prior year.

Earnings Per Share Increase: GAAP earnings of $6.59 per share, up 28% from the prior year.

Non-GAAP Net Income Increase: Non-GAAP net income of $193 million, up 25% from the prior year.

Earnings Per Share Increase: Non-GAAP earnings of $7.81 per share, up 27% from the prior year.

Free Cash Flow Increase: Free cash flow of $65 million in quarter two, with $677 million over the last four quarters, a 45% increase year-over-year.

Segment Revenue Increase: Scores segment revenues of $297 million, up 25% from the prior year, with B2B revenues up 31%.

Mortgage Origination Revenue Surge: Mortgage origination revenues increased by 48% year-over-year, accounting for 54% of B2B revenue.

Financial Inclusion in Kenya: FICO continues to build financial inclusion globally, announcing a Kenya-specific FICO Score to empower underserved consumers.

Mortgage Decision Support Tool: FICO Score mortgage simulator now available for lender use, helping drive smarter decisions.

FICO Score 10T Adoption: Strong adoption of FICO Score 10T, with clients having over $284 billion in annualized mortgage originations signed up.

Software Revenue Increase: Software segment revenues of $202 million, up 2% from the prior year, with total ARR up 3%.

Platform ARR Growth: Platform ARR grew 17% year-over-year, while non-platform ARR declined 3%.

Net Revenue Retention: Total NRR for the quarter was 102%, with platform NRR at 110%.

Quarterly ACV Bookings Increase: ACV bookings for the quarter were $21.8 million, compared to $16.8 million in the prior year.

Digital Transformation Partnerships: Partnerships with Fujitsu and Dakado to enhance digital transformation and life insurance solutions.

Customer Engagement Innovations: FICO World Conference to showcase innovations and customer success stories, enhancing customer engagement.

Software Revenue Slowdown: The software segment revenue growth was only 2%, indicating a slowdown compared to previous quarters, which raises concerns about the overall health of this segment.

Professional Services Revenue Decline: Professional services revenue declined by 9%, suggesting potential challenges in this area and a need for improvement in service delivery.

Non-Platform ARR Decline: There was a noted decline in non-platform ARR by 3%, which could indicate issues with customer retention or satisfaction in that segment.

CCS Usage Challenges: The company experienced headwinds in CCS usage, as some customers chose to delay or downsize outreach programs due to macroeconomic volatility, which could impact future revenue.

Higher Than Expected Tax Rate: The effective tax rate for the quarter was 23.7%, which is higher than expected, potentially affecting net income and cash flow.

Macroeconomic Uncertainty Impact: The company acknowledged uncertainty in the macroeconomic environment, which could lead to delays in deal closures and affect future growth prospects.