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Fair Isaac (FICO - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $11.10 per share, up 43.4% year over year and 2.4% above the Zacks Consensus Estimate.
Revenues increased 27.4% year over year to $657.05 million, surpassing the consensus mark by 0.72%. The quarter benefited from higher mortgage origination Scores pricing and strong software-platform growth, partially offset by weaker mortgage volumes. Software annual recurring revenue (ARR) reached $851 million, up 14% year over year, driven by a 72% increase in platform ARR.
FICO Scores Revenues Rise on Mortgage Pricing
Scores revenues increased 33% year over year to $413.8 million. Business-to-business (B2B) revenues climbed 39% to $356 million, primarily driven by higher mortgage origination score unit prices, partially offset by declining mortgage volumes. Business-to-consumer (B2C) revenues grew 3% to $58 million, reflecting higher royalties from indirect channel partners.
Mortgage origination revenues surged 72% year over year despite volumes declining in the high-single digits amid elevated interest rates. Mortgage originations accounted for 67% of B2B revenues and 58% of total Scores revenues. Auto origination revenues rose 11%, while credit card, personal loan and other origination revenues increased 12%.
Fair Isaac Corporation Price, Consensus and EPS Surprise
Software revenues increased 19% year over year to $243.2 million. SaaS revenues grew 29%, supported by FICO Platform adoption, while on-premises revenues rose 13% due to higher point-in-time revenues. Platform revenues jumped 84%, reflecting customer expansion and migrations, while non-platform revenues declined 12%.
Platform ARR reached $453 million, representing 53% of total software ARR, while non-platform ARR declined 18% to $398 million. Platform dollar-based net retention improved to 156% from 82% for non-platform software, bringing total retention to 112%. The metric measures recurring revenue retained from existing customers, including expansion.
Trailing 12-month software annual contract value bookings increased 36% year over year to $140 million. Quarterly bookings totaled $45 million, marking continued demand for the company’s decisioning software.
FICO Expands Scores Distribution and AI Platform
Fair Isaac expanded its mortgage direct licensing agreements to resellers representing approximately 73% of U.S. mortgage volume. The FICO Score 10T Adopter Program reached 84 lenders, representing $684 billion in eligible annual originations and $2.65 trillion in eligible annual servicing.
The company also launched its FICO Preferred Program, offering participating lenders customized mortgage pricing arrangements. Separately, the next-generation FICO Platform and Enterprise Fraud Solution became generally available in October, strengthening its AI-driven decisioning and fraud prevention capabilities.
FICO Margins Expand Despite Higher Expenses
Total operating expenses increased 40.2% year over year to $390.5 million. Research and development expenses rose 1.6% to $51.8 million, while selling, general and administrative expenses increased 79.6% to $225.4 million.
Operating income increased 12.4% year over year to $266.6 million. Non-GAAP operating income reached $402.4 million, while the non-GAAP operating margin expanded to 61% from 54% a year earlier.
Fair Isaac’s Cash Flow and Debt Position
As of Sept. 30, 2026, Fair Isaac had $217.6 million in cash and cash equivalents compared with $248.4 million as of June 30, 2026. Total debt stood at approximately $5.26 billion.
Net cash from operating activities increased to $294.2 million from $223.7 million a year earlier. Free cash flow rose to $284.3 million from $210.8 million.
Fair Isaac Withholds Fiscal 2027 Guidance
Management did not provide fiscal 2027 guidance, citing uncertainty surrounding its transition to customized mortgage origination pricing and continued weakness in mortgage market activity.
Elevated interest rates and affordability pressures remain headwinds to origination volumes.
FICO expects to continue negotiating customer-specific pricing programs for calendar 2027. Management also anticipates a significant decline in professional services revenues as it emphasizes strategic partnerships and AI-driven operating efficiencies. The company expects a fiscal 2027 operating tax rate of 26%.
FICO’s Zacks Rank & Stocks to Consider
Fair Isaac currently carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
FICO Q4 Earnings Beat on Scores, Pricing and Software Growth
Key Takeaways
Fair Isaac (FICO - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $11.10 per share, up 43.4% year over year and 2.4% above the Zacks Consensus Estimate.
Revenues increased 27.4% year over year to $657.05 million, surpassing the consensus mark by 0.72%. The quarter benefited from higher mortgage origination Scores pricing and strong software-platform growth, partially offset by weaker mortgage volumes. Software annual recurring revenue (ARR) reached $851 million, up 14% year over year, driven by a 72% increase in platform ARR.
FICO Scores Revenues Rise on Mortgage Pricing
Scores revenues increased 33% year over year to $413.8 million. Business-to-business (B2B) revenues climbed 39% to $356 million, primarily driven by higher mortgage origination score unit prices, partially offset by declining mortgage volumes. Business-to-consumer (B2C) revenues grew 3% to $58 million, reflecting higher royalties from indirect channel partners.
Mortgage origination revenues surged 72% year over year despite volumes declining in the high-single digits amid elevated interest rates. Mortgage originations accounted for 67% of B2B revenues and 58% of total Scores revenues. Auto origination revenues rose 11%, while credit card, personal loan and other origination revenues increased 12%.
Fair Isaac Corporation Price, Consensus and EPS Surprise
Fair Isaac Corporation price-consensus-eps-surprise-chart | Fair Isaac Corporation Quote
Fair Isaac Software Growth Accelerates
Software revenues increased 19% year over year to $243.2 million. SaaS revenues grew 29%, supported by FICO Platform adoption, while on-premises revenues rose 13% due to higher point-in-time revenues. Platform revenues jumped 84%, reflecting customer expansion and migrations, while non-platform revenues declined 12%.
Platform ARR reached $453 million, representing 53% of total software ARR, while non-platform ARR declined 18% to $398 million. Platform dollar-based net retention improved to 156% from 82% for non-platform software, bringing total retention to 112%. The metric measures recurring revenue retained from existing customers, including expansion.
Trailing 12-month software annual contract value bookings increased 36% year over year to $140 million. Quarterly bookings totaled $45 million, marking continued demand for the company’s decisioning software.
FICO Expands Scores Distribution and AI Platform
Fair Isaac expanded its mortgage direct licensing agreements to resellers representing approximately 73% of U.S. mortgage volume. The FICO Score 10T Adopter Program reached 84 lenders, representing $684 billion in eligible annual originations and $2.65 trillion in eligible annual servicing.
The company also launched its FICO Preferred Program, offering participating lenders customized mortgage pricing arrangements. Separately, the next-generation FICO Platform and Enterprise Fraud Solution became generally available in October, strengthening its AI-driven decisioning and fraud prevention capabilities.
FICO Margins Expand Despite Higher Expenses
Total operating expenses increased 40.2% year over year to $390.5 million. Research and development expenses rose 1.6% to $51.8 million, while selling, general and administrative expenses increased 79.6% to $225.4 million.
Operating income increased 12.4% year over year to $266.6 million. Non-GAAP operating income reached $402.4 million, while the non-GAAP operating margin expanded to 61% from 54% a year earlier.
Fair Isaac’s Cash Flow and Debt Position
As of Sept. 30, 2026, Fair Isaac had $217.6 million in cash and cash equivalents compared with $248.4 million as of June 30, 2026. Total debt stood at approximately $5.26 billion.
Net cash from operating activities increased to $294.2 million from $223.7 million a year earlier. Free cash flow rose to $284.3 million from $210.8 million.
Fair Isaac Withholds Fiscal 2027 Guidance
Management did not provide fiscal 2027 guidance, citing uncertainty surrounding its transition to customized mortgage origination pricing and continued weakness in mortgage market activity.
Elevated interest rates and affordability pressures remain headwinds to origination volumes.
FICO expects to continue negotiating customer-specific pricing programs for calendar 2027. Management also anticipates a significant decline in professional services revenues as it emphasizes strategic partnerships and AI-driven operating efficiencies. The company expects a fiscal 2027 operating tax rate of 26%.
FICO’s Zacks Rank & Stocks to Consider
Fair Isaac currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Cisco Systems (CSCO - Free Report) , Analog Devices (ADI - Free Report) and NVIDIA (NVDA - Free Report) . Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cisco Systems shares have gained 34.5% year to date. Cisco Systems is set to report first-quarter fiscal 2027 results on Nov. 12.
Shares of Analog Devices have risen 49.7% year to date. Analog Devices is set to report fourth-quarter fiscal 2026 results on Nov. 24.
NVIDIA shares have gained 7.3% year to date. NVIDIA is set to report third-quarter fiscal 2027 results on Nov. 17.