It has been about a month since the last earnings report for Fair Isaac (FICO Quick QuoteFICO - Free Report) . Shares have added about 1.5% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Fair Isaac due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Fair Isaac Q3 Earnings Beat Estimates on Scores, Revenues Up Y/Y

Fair Isaac Corporation reported third-quarter fiscal 2026 non-GAAP earnings of $12.18 per share, up 42.1% year over year and 1.33% above the Zacks Consensus Estimate. 

Revenues rose 25.7% to $674.19 million but missed the consensus mark by 0.75%. The quarter benefited from strong business-to-business Scores demand, led by mortgage pricing, while software growth remained modest. Software annual recurring revenues reached $816 million, up 10% year over year, as platform ARR advanced 62%.

FICO Scores Segment Extends Lead

Scores revenues increased 41% year over year to $458.9 million. Business-to-business revenues climbed 49% year over year, mainly due to a higher mortgage origination score unit price, while business-to-consumer revenues grew 5% year over year on higher royalties from scores sold indirectly through credit reporting agencies. 

Mortgage origination revenues surged 97% year over year, with volumes rising in the low-single digits. Mortgage originations accounted for 71% of B2B revenues and 62% of total Scores revenues. Auto originations revenues increased 15% year over year, while credit card, personal loan, and other originations revenues rose 9%. 

The FICO Score 10T Adopter Program expanded to 70 lenders and represented $587 billion in eligible annual originations and $1.87 trillion in eligible annual servicing. FICO also signed direct licensing agreements with resellers representing about 60% of U.S. mortgage volume and remained in discussions that could bring coverage closer to 90%.

Fair Isaac Software Mix Shifts to Platform

Software revenues edged up 2% year over year to $215.3 million. On a year-over-year basis, SaaS revenues grew 21%, while on-premises revenues declined 16% and professional services revenues fell 24%. Excluding point-in-time and professional services revenues, the segment grew 10% year over year. 

Platform revenues jumped 66% and exceeded non-platform revenues for the first time. Platform ARR reached $413 million and represented 51% of total software ARR. Platform dollar-based net retention was 148% compared with 82% for non-platform software, lifting the total retention rate to 109%. 

Trailing 12-month software annual contract value bookings rose 39% year over year to $128 million. FICO also expanded its Accenture collaboration to support platform distribution and expects the next-generation FICO Platform, including its enterprise fraud solution, to become generally available later in calendar 2026.

FICO Margins Expand Despite Higher Costs

Total operating expenses increased 13.8% year over year to $311.6 million. Research and development expenses rose 13.8% year over year to $53.7 million, while selling, general and administrative expenses increased 22.8% year over year to $170.8 million.

Operating income increased 38.1% year over year to $362.6 million. The non-GAAP operating margin expanded to 62% from 57% a year earlier, an improvement of 479 basis points. Management noted that strong B2B Scores growth was partly offset by higher personnel and interest expenses.

Fair Isaac’s Balance Sheet and Cash Flow

As of June 30, 2026, FICO had $248.4 million in cash and cash equivalents compared with $219.4 million as of March 31, 2026. Total debt was $5.58 billion.

Net cash from operating activities was $380.4 million, up from $286.2 million in the prior-year quarter. Free cash flow increased to $370.3 million from $276.2 million. Trailing 12-month free cash flow totaled $961 million, up 28%.

FICO repurchased 1.705 million shares for $1.96 billion at an average price of $1,149 per share, marking its largest quarterly repurchase in dollar terms.

FICO Raises Fiscal 2026 Outlook

Management lifted fiscal 2026 revenue guidance to $2.53 billion from $2.45 billion. GAAP net income is now expected to be $850 million, with GAAP earnings projected to be $36.86 per share.

Non-GAAP net income guidance increased to $979 million from $946 million, while non-GAAP earnings guidance rose to $42.43 per share from $40.45. The updated view reflects continued Scores momentum and software-platform execution.

Fourth-quarter operating expenses are expected to be modestly higher sequentially because of marketing tied to the Accenture partnership and anticipated one-time restructuring charges. Elevated interest rates and affordability pressures also continue to keep mortgage originations below historical norms.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -6.74% due to these changes.

VGM Scores

At this time, Fair Isaac has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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. Interestingly, Fair Isaac has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Fair Isaac is part of the Zacks Computers - IT Services industry. Over the past month, CoStar Group (CSGP Quick QuoteCSGP - Free Report) , a stock from the same industry, has gained 6.4%. The company reported its results for the quarter ended June 2026 more than a month ago.

CoStar reported revenues of $925 million in the last reported quarter, representing a year-over-year change of +18.4%. EPS of $0.32 for the same period compares with $0.17 a year ago.

CoStar is expected to post earnings of $0.33 per share for the current quarter, representing a year-over-year change of +43.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.8%.

CoStar has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.