FRI - FICO Announces Earnings of $4.80 per Share for First Quarter Fiscal 2024

January, 25 2024 04:15 PM First Trust S&P REIT Index Fund

Revenue of $382 million vs. $345 million in prior year

FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its first fiscal quarter ended December 31, 2023.

First Quarter Fiscal 2024 GAAP Results

Net income for the quarter totaled $121.1 million, or $4.80 per share, versus $97.6 million, or $3.84 per share, in the prior year period.

Net cash provided by operating activities for the quarter was $122.1 million versus $92.4 million in the prior year period.

First Quarter Fiscal 2024 Non-GAAP Results

Non-GAAP Net Income for the quarter was $121.2 million versus $108.5 million in the prior year period. Non-GAAP EPS for the quarter was $4.81 versus $4.26 in the prior year period. Free cash flow was $120.8 million for the current quarter versus $91.6 million in the prior year period. The Non-GAAP financial measures are described in the financial table captioned “Non-GAAP Results” and are reconciled to the corresponding GAAP results in the financial tables at the end of this release.

First Quarter Fiscal 2024 GAAP Revenue

The company reported revenues of $382.1 million for the quarter as compared to $344.9 million reported in the prior year period.

“We had a good start to our fiscal year, with another quarter of strong growth,” said Will Lansing, chief executive officer. “We reiterate our fiscal year 2024 guidance, which includes double-digit percentage revenue and EPS growth.”

Revenues for the first quarter of fiscal 2024 for the company’s two operating segments were as follows:

Scores revenues, which include the company’s business-to-business (B2B) scoring solutions, and business-to-consumer (B2C) solutions, were $192.1 million in the first quarter, compared to $178.0 million in the prior year period, an increase of 8%. B2B revenue increased 12%, primarily attributable to a higher unit price. B2C revenue decreased 3% from the prior year period due to lower volumes on myFICO.com business.
Software revenues, which include the company’s analytics and digital decisioning technology, were $190.0 million in the first quarter, compared to $166.9 million in the prior year period, an increase of 14%, due to increased recurring revenue, partially offset by decreases in professional services. Software Annual Recurring Revenue was up 18% year-over-year, consisting of 43% platform ARR growth and 11% non-platform growth. Software Dollar-Based Net Retention Rate was 114% in the first quarter, with platform software at 136% and non-platform software at 108%.

Outlook

The company is re-iterating its previously provided guidance for fiscal 2024:

Fiscal 2024 Guidance

Revenues

$ 1.675 billion

GAAP Net Income

$ 490 million

GAAP EPS

$ 19.45

Non-GAAP Net Income

$ 566 million

Non-GAAP EPS

$ 22.45

The Non-GAAP financial measures are described in the financial table captioned “Reconciliation of Non-GAAP Guidance.”

Company to Host Conference Call

The company will host a webcast on January 25, 2024 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to report its first quarter fiscal 2024 results and provide various strategic and operational updates. The call can be accessed at FICO's web site at www.fico.com/investors . A replay of the webcast will be available at our Past Events page through January 25, 2025.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 215 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail, and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency.

Learn more at http://www.fico.com

Join the conversation at https://twitter.com/fico & http://www.fico.com/en/blogs/

For FICO news and media resources, visit www.fico.com/news .

FICO is a registered trademark of Fair Isaac Corporation in the US and other countries.

Statement Concerning Forward-Looking Information

Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Software segment’s business strategy, the Company’s ability to continue to develop new and enhanced products and services, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, disruptions and uncertainties with respect to global economic conditions as well as in industries and markets of the Company and its customers, the Company’s ability to keep up with rapidly changing technologies, its ability to recruit and retain qualified personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to protect such data, the failure to realize the anticipated benefits of any acquisitions, or divestitures, and material adverse developments in global economic conditions or the occurrence of certain other world events such as geopolitical tensions, military conflicts, the level and volatility of interest rates, the level of inflation, the continuing effects of the COVID-19 pandemic, an actual recession or fears of a recession, trade policies and tariffs, and political and governmental instability. Additional information on these risks and uncertainties and other factors that could affect FICO's future results are described from time to time in FICO's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2023 and its subsequent filings with the SEC. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. FICO disclaims any intent or obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise.


FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)













December 31,

September 30,


2023



2023

ASSETS:



Current assets:



Cash and cash equivalents
$
160,421


$
136,778

Accounts receivable, net

367,478



387,947

Prepaid expenses and other current assets

37,364



31,723

Total current assets

565,263



556,448





Marketable securities and investments

38,213



34,237

Property and equipment, net

10,406



10,966

Operating lease right-of-use-assets

18,916



25,703

Goodwill and intangible assets, net

777,837



774,244

Other assets

182,883



173,683


$
1,593,518


$
1,575,281





LIABILITIES AND STOCKHOLDERS' DEFICIT:



Current liabilities:



Accounts payable and other accrued liabilities
$
65,071


$
78,487

Accrued compensation and employee benefits

68,216



102,471

Deferred revenue

146,822



136,730

Current maturities on debt

153,000



50,000

Total current liabilities

433,109



367,688





Long-term debt

1,808,655



1,811,658

Operating lease liabilities

11,899



23,903

Other liabilities

65,620



60,022

Total liabilities

2,319,283



2,263,271





Stockholders' deficit

(725,765
)


(687,990
)

$
1,593,518


$
1,575,281

FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)









Quarter Ended

December 31,


2023



2022

Revenues:



On-premises and SaaS software
$
168,668


$
144,560

Professional services

21,279



22,322

Scores

192,112



177,988

Total revenues

382,059



344,870





Operating expenses:



Cost of revenues

83,461



76,569

Research & development

42,635



36,633

Selling, general and administrative

104,329



92,995

Amortization of intangible assets

275



275

Gain on product line asset sale

-



(1,941
)
Total operating expenses

230,700



204,531

Operating income

151,359



140,339

Other expense, net

(20,769
)


(22,436
)
Income before income taxes

130,590



117,903

Provision for income taxes

9,525



20,260

Net income
$
121,065


$
97,643













Basic earnings per share:
$
4.89


$
3.90

Diluted earnings per share:
$
4.80


$
3.84





Shares used in computing earnings per share:



Basic

24,764



25,045

Diluted

25,219



25,443

FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)









Quarter Ended

December 31,


2023



2022

Cash flows from operating activities:



Net income
$
121,065


$
97,643

Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation and amortization

2,824



4,280

Share-based compensation

31,574



29,702

Changes in operating assets and liabilities

(30,343
)


(33,250
)
Gain on product line asset sale

-



(1,941
)
Other, net

(3,000
)


(3,994
)
Net cash provided by operating activities

122,120



92,440





Cash flows from investing activities:



Purchases of property and equipment

(1,361
)


(850
)
Net activity from marketable securities

(1,057
)


(2,165
)
Proceeds from product line asset sales, net of cash transferred

-



(7,575
)
Net cash used in investing activities

(2,418
)


(10,590
)




Cash flows from financing activities:



Proceeds from revolving line of credit and term loan

170,000



169,000

Payments on revolving line of credit and term loan

(70,750
)


(102,750
)
Proceeds from issuance of treasury stock under employee stock plans

4,499



1,995

Taxes paid related to net share settlement of equity awards

(131,911
)


(72,865
)
Repurchases of common stock

(71,704
)


(75,004
)
Net cash used in financing activities

(99,866
)


(79,624
)




Effect of exchange rate changes on cash

3,807



4,428





Increase in cash and cash equivalents

23,643



6,654

Cash and cash equivalents, beginning of period

136,778



133,202

Cash and cash equivalents, end of period
$
160,421


$
139,856

FAIR ISAAC CORPORATION
NON-GAAP RESULTS
(In thousands, except per share data)
(Unaudited)









Quarter Ended

December 31,


2023



2022





GAAP net income
$
121,065


$
97,643

Amortization of intangible assets

275



275

Gain on product line asset sale

-



(1,941
)
Share-based compensation expense

31,574



29,702

Income tax adjustments

(7,915
)


(6,914
)
Excess tax benefit

(23,775
)


(10,304
)
Non-GAAP net income
$
121,224


$
108,461









GAAP diluted earnings per share
$
4.80


$
3.84

Amortization of intangible assets

0.01



0.01

Gain on product line asset sale

-



(0.08
)
Share-based compensation expense

1.25



1.17

Income tax adjustments

(0.31
)


(0.27
)
Excess tax benefit

(0.94
)


(0.40
)
Non-GAAP diluted earnings per share
$
4.81


$
4.26





Free cash flow



Net cash provided by operating activities
$
122,120


$
92,440

Capital expenditures

(1,361
)


(850
)
Free cash flow
$
120,759


$
91,590





Note: The numbers may not sum to total due to rounding.

About Non-GAAP Financial Measures

To supplement the consolidated GAAP financial statements, the company uses the following non-GAAP financial measures: non-GAAP net income, non-GAAP EPS, and free cash flow. Non-GAAP net income and non-GAAP EPS exclude, to the extent applicable, such items as the impact of amortization expense, share-based compensation expense, restructuring and acquisition-related, excess tax benefit, and adjustment to tax valuation allowance items. Free cash flow excludes capital expenditures. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Management uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of recurring business results including significant non-cash expenses. We believe management and investors benefit from referring to these non-GAAP financial measures in assessing our performance when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to historical performance and liquidity as well as comparisons to our competitors’ operating results. We believe these non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key measures used by management in its financial and operating decision-making.


FAIR ISAAC CORPORATION
RECONCILIATION OF NON-GAAP GUIDANCE
(In millions, except per share data)
(Unaudited)



Fiscal 2024 Guidance


GAAP net income
$
490

Amortization of intangible assets

1

Share-based compensation expense

140

Income tax adjustments

(35
)
Excess tax benefit

(30
)
Non-GAAP net income
$
566





GAAP diluted earnings per share
$
19.45

Amortization of intangible assets

0.04

Share-based compensation expense

5.55

Income tax adjustments

(1.40
)
Excess tax benefit

(1.19
)
Non-GAAP diluted earnings per share
$
22.45



Note: The numbers may not sum to total due to rounding.

About Non-GAAP Financial Measures

View source version on businesswire.com: https://www.businesswire.com/news/home/20240125347623/en/

Investors/Analysts:

Dave Singleton
Fair Isaac Corporation
(800) 459-7125
investor@fico.com

Company Name:	First Trust S&P REIT Index Fund
Stock Symbol:	FRI
Market:	NYSE

Twitter