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Fair Isaac (FICO) Up 4.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Fair Isaac (FICO - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fair Isaac due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Fair Isaac Corporation before we dive into how investors and analysts have reacted as of late.
Fair Isaac Q3 Earnings Top Estimates, Revenues Rise Y/Y
Fair Isaac reported third-quarter fiscal 2025 non-GAAP earnings of $8.57 per share, which surpassed the Zacks Consensus Estimate by 10.87% and jumped 37.1% year over year.
Revenues of $536.4 million beat the consensus mark by 3.4% and increased 19.8% year over year. The Americas, EMEA and Asia Pacific contributed 87%, 8% and 5% to total revenues, respectively. Scores (60.5% of revenues) increased 34.3% year over year to $324.3 million.
FICO’s Top-Line Details
Software revenues, which include Fair Isaac’s analytics and digital-decisioning technology, as well as associated professional services, increased 2.8% year over year to $212.1 million.
Software Annual Recurring Revenues (ARR) increased 4% year over year, consisting of 18% platform ARR growth and a 2% decline in non-platform ARR. Software Dollar-Based Net Retention Rate was 103% in the fiscal third quarter, with platform software at 115% and non-platform software at 97%. On-premises and SaaS Software (35% of revenues) increased 2.2% year over year to $187.9 million. Professional services (4.5% of revenues) were $24.2 million, up 7% year over year.
Scores include FICO’s business-to-business (B2B) scoring solutions and business-to-consumer (B2C) scoring solutions. B2B revenues increased 42% year over year, driven primarily by higher unit prices, an increase in volume of mortgage originations and a multi-year license renewal in the U.S. B2C revenues increased 6% year over year, aided by an increase in royalties derived from scores sold indirectly through credit reporting agencies.
Mortgage-originations revenues increased 53% year over year. Auto-originations revenues increased 23% year over year. Credit card, personal loan and other origination revenues are up 3% year over year.
FICO continues to advance financial inclusion on a global scale. In the third quarter of fiscal 2025, the company officially launched its FICO Score10 BNPL and FICO Score10T BNPL models, integrating Buy-Now-Pay-Later data into credit scoring. It is also driving strong adoption of FICO Score 10 T for non-GSE loans and is seeing promising outcomes from the early adopter program.
FICO’s Operating Details
Research and development expenses, as a percentage of revenues, contracted 110 basis points (bps) year over year to 8.8%.
Selling, general and administrative expenses, as a percentage of revenues, decreased 200 bps year over year to 25.9%.
Adjusted EBITDA increased 31.9% year over year to $312.3 million in the reported quarter. The adjusted EBITDA margin in the fiscal third quarter of 2025 was 58.2% compared with 52.9% in the fiscal third quarter of 2024.
FICO’s Balance Sheet & Cash Flow
As of June 30, 2025, FICO had $189 million in cash and cash equivalents, and total debt was $2.8 billion.
Cash flow from operations was $286.2 million in the fiscal third quarter compared with $213.3 million in the prior-year period. Free cash flow was $276.2 million for the reported quarter compared with $205.7 million reported in the prior-year period.
In the fiscal third quarter, FICO repurchased 284K shares.
FICO Reiterates Fiscal 2025 Guidance
For fiscal 2025, FICO anticipates revenues of $1.98 billion. Non-GAAP earnings are projected to be $29.15 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.19% due to these changes.
VGM Scores
Currently, Fair Isaac has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fair Isaac has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Fair Isaac (FICO) Up 4.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Fair Isaac (FICO - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fair Isaac due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Fair Isaac Corporation before we dive into how investors and analysts have reacted as of late.
Fair Isaac Q3 Earnings Top Estimates, Revenues Rise Y/Y
Fair Isaac reported third-quarter fiscal 2025 non-GAAP earnings of $8.57 per share, which surpassed the Zacks Consensus Estimate by 10.87% and jumped 37.1% year over year.
Revenues of $536.4 million beat the consensus mark by 3.4% and increased 19.8% year over year. The Americas, EMEA and Asia Pacific contributed 87%, 8% and 5% to total revenues, respectively. Scores (60.5% of revenues) increased 34.3% year over year to $324.3 million.
FICO’s Top-Line Details
Software revenues, which include Fair Isaac’s analytics and digital-decisioning technology, as well as associated professional services, increased 2.8% year over year to $212.1 million.
Software Annual Recurring Revenues (ARR) increased 4% year over year, consisting of 18% platform ARR growth and a 2% decline in non-platform ARR. Software Dollar-Based Net Retention Rate was 103% in the fiscal third quarter, with platform software at 115% and non-platform software at 97%. On-premises and SaaS Software (35% of revenues) increased 2.2% year over year to $187.9 million. Professional services (4.5% of revenues) were $24.2 million, up 7% year over year.
Scores include FICO’s business-to-business (B2B) scoring solutions and business-to-consumer (B2C) scoring solutions. B2B revenues increased 42% year over year, driven primarily by higher unit prices, an increase in volume of mortgage originations and a multi-year license renewal in the U.S. B2C revenues increased 6% year over year, aided by an increase in royalties derived from scores sold indirectly through credit reporting agencies.
Mortgage-originations revenues increased 53% year over year. Auto-originations revenues increased 23% year over year. Credit card, personal loan and other origination revenues are up 3% year over year.
FICO continues to advance financial inclusion on a global scale. In the third quarter of fiscal 2025, the company officially launched its FICO Score10 BNPL and FICO Score10T BNPL models, integrating Buy-Now-Pay-Later data into credit scoring. It is also driving strong adoption of FICO Score 10 T for non-GSE loans and is seeing promising outcomes from the early adopter program.
FICO’s Operating Details
Research and development expenses, as a percentage of revenues, contracted 110 basis points (bps) year over year to 8.8%.
Selling, general and administrative expenses, as a percentage of revenues, decreased 200 bps year over year to 25.9%.
Adjusted EBITDA increased 31.9% year over year to $312.3 million in the reported quarter. The adjusted EBITDA margin in the fiscal third quarter of 2025 was 58.2% compared with 52.9% in the fiscal third quarter of 2024.
FICO’s Balance Sheet & Cash Flow
As of June 30, 2025, FICO had $189 million in cash and cash equivalents, and total debt was $2.8 billion.
Cash flow from operations was $286.2 million in the fiscal third quarter compared with $213.3 million in the prior-year period. Free cash flow was $276.2 million for the reported quarter compared with $205.7 million reported in the prior-year period.
In the fiscal third quarter, FICO repurchased 284K shares.
FICO Reiterates Fiscal 2025 Guidance
For fiscal 2025, FICO anticipates revenues of $1.98 billion. Non-GAAP earnings are projected to be $29.15 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.19% due to these changes.
VGM Scores
Currently, Fair Isaac has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fair Isaac has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.