Fair Isaac (FICO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $447.8 million, up 12% year-over-year, driven by strong adoption of FICO 10 T and FICO Platform, with record free cash flow of $205.7 million.

• Scores segment revenue grew 20% to $241.5 million, with B2B up 27% and B2C down 2%; Software segment revenue increased 5% to $206.4 million.

• GAAP net income was $126.3 million (down 2% year-over-year), while non-GAAP net income was $156.4 million (up 9%).

• Raised full-year guidance: revenue now expected at $1.70 billion, GAAP net income at $500 million, and non-GAAP net income at $582 million.

• A new $1 billion share repurchase program was authorized, replacing the prior $500 million program.

Financial highlights

• Q3 GAAP EPS was $5.05 (down 1%), non-GAAP EPS was $6.25 (up 10%).

• Free cash flow for Q3 was $205.7 million, up from $121.8 million year-over-year.

• Non-GAAP operating margin was 52%, up from 51% a year ago.

• Operating expenses rose 16% year-over-year, mainly due to higher infrastructure, personnel, and event costs.

• Adjusted EBITDA was $236.8 million, up 10% year-over-year.

Outlook and guidance

• Full-year revenue guidance raised to $1.70 billion.

• GAAP net income guidance increased to $500 million; non-GAAP net income to $582 million.

• GAAP EPS guidance is $19.90; non-GAAP EPS is $23.16.

• Anticipates Q4 expenses to decline modestly from Q3 levels.

• Management expects liquidity and cash flows to be sufficient for at least the next 12 months.