We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Fair Isaac Q2 Earnings Beat Estimates on Scores, Revenue Up Y/Y
Read MoreHide Full Article
Key Takeaways
Fair Isaac beat Q2 estimates with EPS up 60% and revenue rising 38.7% year over year.
FICO Scores revenue jumped 60%, driven by a 127% surge in mortgage originations revenue.
Fair Isaac raised its FY2026 revenue outlook to $2.45B and boosted earnings guidance after strong H1.
Fair Isaac (FICO - Free Report) posted a strong second-quarter fiscal 2026, with non-GAAP earnings of $12.5 per share, beating the Zacks Consensus Estimate by 13.33% and rising 60.1% from the year-ago quarter.
Revenues were $692 million, beating the consensus mark by 10.64% and increasing 38.7% year over year.
Results reflected sharp momentum in credit-related activity, highlighted by a 127% year-over-year jump in mortgage originations revenue, alongside continued execution in the company’s decisioning software strategy.
FICO Benefits From Scores Business
Scores segment revenue rose 60% year over year to $475.0 million, underscoring the durability of FICO’s franchise in U.S. credit markets. Growth was led by the business-to-business channel, where revenue increased 72% from the prior-year period, benefiting from higher mortgage origination scores, unit pricing and higher mortgage origination volumes.
Fair Isaac Corporation Price, Consensus and EPS Surprise
Business-to-consumer Scores revenue increased 5% year over year, supported mainly by indirect channel partners. Within originations, auto revenue grew 13%, and credit card, personal loan, and other originations increased 6% year over year compared with the year-ago quarter, indicating broader-based demand beyond mortgages. Mortgage originations revenues rose 127% year over year.
Fair Isaac Gains From Software Platform Revenue
Software revenue increased 7% year over year to $216.7 million, supported by continued penetration of the FICO Platform. Platform revenue climbed 54% from the prior-year quarter, while non-platform revenue declined 12%, largely due to migrations.
Total software annual recurring revenue (ARR) was $789 million, up 10% year over year, with platform ARR of $349 million rising 49% and representing 44% of total ARR. Dollar-based net retention rate was 109%, including 136% for platform and 90% for non-platform, reflecting expansion in platform use cases and volumes even as legacy products face headwinds.
FICO’s Operating Details
Research and development expenses, as a percentage of revenues, contracted 120 basis points (bps) on a year-over-year basis to 7.8%. Selling, general, and administrative expenses, as a percentage of revenues, decreased 330 bps year over year to 20.8%.
Non-GAAP operating margin expanded to 65% from 58% in the year-ago period, as revenue growth outpaced incremental spending.
Adjusted EBITDA increased 55.8% year over year to $448.5 million in the reported quarter. The adjusted EBITDA margin in the fiscal second quarter of 2026 was 64.8% compared with 57.7% in the fiscal second quarter of 2025.
Fair Isaac’s Balance Sheet and Cash Flow
As of March 31, 2026, FICO had $219.4 million in cash and cash equivalents compared with $162 million as of Dec. 31, 2025. Total debt was $3.64 billion.
Cash flow from operations was $223 million in the fiscal second quarter compared with $174 million in the prior quarter. Free cash flow was $214.3 million in the reported quarter compared with $165.3 million reported in the prior quarter.
FICO continued to prioritize capital returns. The company repurchased 484,000 shares for $605 million at an average price of $1,251 per share, cited as its largest quarterly repurchase in dollar terms.
FICO Raises Full-Year 2026 Outlook After Strong First Half
Reflecting the first-half performance, management raised full-year fiscal 2026 guidance.
Revenue is now expected to be $2.45 billion, up from the prior view of $2.35 billion.
On a non-GAAP basis,earnings are projected to be $40.45 per share.
Shares of Analog Devices have gained 41.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Shares of Advanced Energy have surged 76.3% in the year-to-date period. Advanced Energy is slated to report first-quarter 2026 results on May 4.
Arista Networks shares have gained 26.1% in the year-to-date period. Arista Networks is set to report first-quarter 2026 results on May 5.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Fair Isaac Q2 Earnings Beat Estimates on Scores, Revenue Up Y/Y
Key Takeaways
Fair Isaac (FICO - Free Report) posted a strong second-quarter fiscal 2026, with non-GAAP earnings of $12.5 per share, beating the Zacks Consensus Estimate by 13.33% and rising 60.1% from the year-ago quarter.
Revenues were $692 million, beating the consensus mark by 10.64% and increasing 38.7% year over year.
Results reflected sharp momentum in credit-related activity, highlighted by a 127% year-over-year jump in mortgage originations revenue, alongside continued execution in the company’s decisioning software strategy.
FICO Benefits From Scores Business
Scores segment revenue rose 60% year over year to $475.0 million, underscoring the durability of FICO’s franchise in U.S. credit markets. Growth was led by the business-to-business channel, where revenue increased 72% from the prior-year period, benefiting from higher mortgage origination scores, unit pricing and higher mortgage origination volumes.
Fair Isaac Corporation Price, Consensus and EPS Surprise
Fair Isaac Corporation price-consensus-eps-surprise-chart | Fair Isaac Corporation Quote
Business-to-consumer Scores revenue increased 5% year over year, supported mainly by indirect channel partners. Within originations, auto revenue grew 13%, and credit card, personal loan, and other originations increased 6% year over year compared with the year-ago quarter, indicating broader-based demand beyond mortgages. Mortgage originations revenues rose 127% year over year.
Fair Isaac Gains From Software Platform Revenue
Software revenue increased 7% year over year to $216.7 million, supported by continued penetration of the FICO Platform. Platform revenue climbed 54% from the prior-year quarter, while non-platform revenue declined 12%, largely due to migrations.
Total software annual recurring revenue (ARR) was $789 million, up 10% year over year, with platform ARR of $349 million rising 49% and representing 44% of total ARR. Dollar-based net retention rate was 109%, including 136% for platform and 90% for non-platform, reflecting expansion in platform use cases and volumes even as legacy products face headwinds.
FICO’s Operating Details
Research and development expenses, as a percentage of revenues, contracted 120 basis points (bps) on a year-over-year basis to 7.8%. Selling, general, and administrative expenses, as a percentage of revenues, decreased 330 bps year over year to 20.8%.
Non-GAAP operating margin expanded to 65% from 58% in the year-ago period, as revenue growth outpaced incremental spending.
Adjusted EBITDA increased 55.8% year over year to $448.5 million in the reported quarter. The adjusted EBITDA margin in the fiscal second quarter of 2026 was 64.8% compared with 57.7% in the fiscal second quarter of 2025.
Fair Isaac’s Balance Sheet and Cash Flow
As of March 31, 2026, FICO had $219.4 million in cash and cash equivalents compared with $162 million as of Dec. 31, 2025. Total debt was $3.64 billion.
Cash flow from operations was $223 million in the fiscal second quarter compared with $174 million in the prior quarter. Free cash flow was $214.3 million in the reported quarter compared with $165.3 million reported in the prior quarter.
FICO continued to prioritize capital returns. The company repurchased 484,000 shares for $605 million at an average price of $1,251 per share, cited as its largest quarterly repurchase in dollar terms.
FICO Raises Full-Year 2026 Outlook After Strong First Half
Reflecting the first-half performance, management raised full-year fiscal 2026 guidance.
Revenue is now expected to be $2.45 billion, up from the prior view of $2.35 billion.
On a non-GAAP basis,earnings are projected to be $40.45 per share.
FICO’s Zacks Rank & Stocks to Consider
FICO currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices (ADI - Free Report) , Advanced Energy (AEIS - Free Report) , and Arista Networks (ANET - Free Report) . Each stock currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 41.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Shares of Advanced Energy have surged 76.3% in the year-to-date period. Advanced Energy is slated to report first-quarter 2026 results on May 4.
Arista Networks shares have gained 26.1% in the year-to-date period. Arista Networks is set to report first-quarter 2026 results on May 5.