FAIR ISAAC CORP (FICO): Results of Operations and Financial Condition
FAIR ISAAC CORP (FICO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 FICO Announces Earnings of $10.45 per Share for Third Quarter Fiscal 2026 Revenue of $674 million vs. $536 million in prior year BOZEMAN, Mont.--(BUSINESS WIRE)--July 29, 2026--FICO (NYSE:FICO), a global analytics software leader, today announced results for its thir
How this was made
The 30-second read
Why it matters
The key tradable items are the raised full-year revenue and EPS targets, supported by higher Q3 GAAP and non-GAAP earnings, improved operating cash flow, and segment growth plus Software ARR and net retention metrics.
Market read
A guidance raise with concrete financial targets typically drives repricing of forward estimates and can shift positioning ahead of the next earnings cycle.
What to watch
Software non-platform ARR declined (17%); traders may underweight the headline ARR growth if non-platform churn or renewal timing re-accelerates.
FICO Announces Earnings of $10.45 per Share for Third Quarter Fiscal 2026 Revenue of $674 million vs. $536 million in prior year
Third-quarter revenue increased 26%, led by 41% Scores growth, while GAAP net income, GAAP diluted EPS, operating cash flow, free cash flow, and full-year fiscal 2026 guidance all increased versus the prior-year period or prior guidance presented in the release.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $674.2 million | – | 26% |
| On-premises and SaaS software revenuesGAAP | $ 196,969 (In thousands) | – | – |
| Professional services revenuesGAAP | $ 18,322 (In thousands) | – | – |
| Scores revenuesGAAP | $458.9 million | – | 41% |
| Cost of revenuesGAAP | $ 87,017 (In thousands) | – | – |
| Research and developmentGAAP | $ 53,708 (In thousands) | – | – |
| Selling, general and administrativeGAAP | $ 170,835 (In thousands) | – | – |
| Total operating expensesGAAP | $ 311,560 (In thousands) | – | – |
| Operating incomeGAAP | $ 362,628 (In thousands) | – | – |
| Other expense, netGAAP | $ (47,969) (In thousands) | – | – |
| Income before income taxesGAAP | $ 314,659 (In thousands) | – | – |
| Provision for income taxesGAAP | $ 77,487 (In thousands) | – | – |
| Net incomeGAAP | $237.2 million | – | – |
| Basic earnings per shareGAAP | $ 10.46 | – | – |
| Diluted earnings per shareGAAP | $10.45 per share | – | – |
| Shares used in computing basic earnings per shareGAAP | 22,670 (In thousands) | – | – |
| Shares used in computing diluted earnings per shareGAAP | 22,703 (In thousands) | – | – |
| Non-GAAP net incomenon-GAAP | $276.6 million | – | – |
| Non-GAAP diluted earnings per sharenon-GAAP | $12.18 | – | – |
| Net cash provided by operating activitiesGAAP | $380.4 million | – | – |
| Capital expendituresother | $10.1 million | – | – |
| Free cash flownon-GAAP | $370.3 million | – | – |
| Nine months total revenuesGAAP | $ 1,877,824 (In thousands) | – | – |
| Nine months operating incomeGAAP | $ 999,142 (In thousands) | – | – |
| Nine months net incomeGAAP | $ 660,003 (In thousands) | – | – |
| Nine months diluted earnings per shareGAAP | $ 28.12 | – | – |
| Nine months non-GAAP net incomenon-GAAP | $ 749,020 (In thousands) | – | – |
| Nine months non-GAAP diluted earnings per sharenon-GAAP | $ 31.91 | – | – |
| Nine months net cash provided by operating activitiesGAAP | $ 777,880 (In thousands) | – | – |
| Nine months capital expendituresother | $ 27,845 (In thousands) | – | – |
| Nine months free cash flownon-GAAP | $ 750,035 (In thousands) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| ScoresB2B revenue increased 49%, primarily attributable to a higher mortgage origination scores unit price. B2C revenue increased 5% from the prior year period, primarily due to increased royalties derived from scores sold indirectly to consumers through credit reporting agencies. | $458.9 million | – | 41% |
| SoftwareSoftware Annual Recurring Revenue (ARR) was up 10% year-over-year, consisting of a 62% increase in platform ARR and a 17% decline in non-platform ARR. | $215.3 million | – | 2% |
Fiscal 2026 outlook
- Revenue$2.53 billion
- NoteGAAP Net Income $850 million
- NoteGAAP EPS $36.86
- NoteNon-GAAP Net Income $979 million
- NoteNon-GAAP EPS $42.43
Capital returns
- Repurchases of common stock: $ 3,045,992 (In thousands) for the nine months ended June 30, 2026, versus $ 866,520 (In thousands) in the prior-year period.
- Taxes paid related to net share settlement of equity awards: $ 111,275 (In thousands) for the nine months ended June 30, 2026, versus $ 203,188 (In thousands) in the prior-year period.
- Proceeds from issuance of treasury stock under employee stock plans: $ 14,935 (In thousands) for the nine months ended June 30, 2026, versus $ 21,908 (In thousands) in the prior-year period.
What drove it
- Total revenue increased 26% to $674.2 million, with Scores revenue of $458.9 million and Software revenue of $215.3 million.
- Scores B2B revenue increased 49%, primarily attributable to a higher mortgage origination scores unit price.
- Scores B2C revenue increased 5%, primarily due to increased royalties derived from scores sold indirectly to consumers through credit reporting agencies.
- Software ARR was up 10% year-over-year on June 30, 2026, with platform ARR up 62%.
- The total Software Dollar-Based Net Retention Rate was 109% on June 30, 2026, including 148% for platform software.
Concerns
- Software revenue was up 2% year-over-year despite Software ARR being up 10% year-over-year.
- Non-platform ARR declined 17% year-over-year and non-platform software Dollar-Based Net Retention Rate was 82% on June 30, 2026.
- Other expense, net was $ 47,969 (In thousands) in the quarter, versus $ 25,527 (In thousands) in the prior-year period.
- Long-term debt was $ 5,282,389 (In thousands) at June 30, 2026, compared with $ 2,656,150 (In thousands) at September 30, 2025.
- Stockholders’ deficit was $ (4,097,135) (In thousands) at June 30, 2026.
What to watch
- Execution against updated fiscal 2026 revenue guidance of $2.53 billion.
- Whether Scores B2B revenue continues to benefit from the higher mortgage origination scores unit price.
- Software revenue growth relative to the 10% year-over-year increase in Software ARR.
- Platform ARR growth and retention relative to the 17% decline in non-platform ARR and 82% non-platform software Dollar-Based Net Retention Rate.
- The effect of debt levels and other expense on earnings and cash deployment.
Balance sheet and cash flow
- Cash and cash equivalents: $ 248,444 (In thousands) at June 30, 2026, versus $ 134,136 (In thousands) at September 30, 2025.
- Marketable securities: $ 56,093 (In thousands) at June 30, 2026, versus $ 54,625 (In thousands) at September 30, 2025.
- Current maturities on debt: $ 300,000 (In thousands) at June 30, 2026, versus $ 399,541 (In thousands) at September 30, 2025.
- Long-term debt: $ 5,282,389 (In thousands) at June 30, 2026, versus $ 2,656,150 (In thousands) at September 30, 2025.
- Stockholders’ deficit: $ (4,097,135) (In thousands) at June 30, 2026, versus $ (1,745,784) (In thousands) at September 30, 2025.
- Purchases of property and equipment: $ (1,355) (In thousands) for the nine months ended June 30, 2026, versus $ (4,751) (In thousands) in the prior-year period.
- Capitalized internal-use software costs: $ (26,491) (In thousands) for the nine months ended June 30, 2026, versus $ (21,831) (In thousands) in the prior-year period.
- Proceeds from revolving line of credit and term loans: $ 2,950,000 (In thousands) for the nine months ended June 30, 2026, versus $ 450,000 (In thousands) in the prior-year period.
- Payments on revolving line of credit and term loans: $ (1,015,000) (In thousands) for the nine months ended June 30, 2026, versus $ (1,368,750) (In thousands) in the prior-year period.
- Proceeds from issuance of senior notes: $ 1,000,000 (In thousands) for the nine months ended June 30, 2026, versus $ 1,500,000 (In thousands) in the prior-year period.
- Payments on senior notes: $ (400,000) (In thousands) for the nine months ended June 30, 2026, versus $ — (In thousands) in the prior-year period.
- Increase in cash and cash equivalents: $ 114,308 (In thousands) for the nine months ended June 30, 2026, versus $ 38,382 (In thousands) in the prior-year period.
Analysis
FICO reported a strong third quarter of fiscal 2026. GAAP revenue was $674.2 million, up 26% from $536.4 million in the prior-year period. GAAP net income was $237.2 million, compared with $181.8 million, and GAAP diluted EPS was $10.45, compared with $7.40. Non-GAAP net income was $276.6 million and non-GAAP EPS was $12.18, compared with $210.6 million and $8.57, respectively, in the prior-year period.
Scores was the principal growth engine. Scores revenue was $458.9 million, up 41%, as B2B revenue increased 49%, primarily attributable to a higher mortgage origination scores unit price. B2C revenue increased 5%, primarily due to increased royalties from scores sold indirectly to consumers through credit reporting agencies. Software revenue was $215.3 million, up 2%, creating a clear difference between the growth rates of the two operating segments.
The software indicators were mixed. Software ARR was up 10% year-over-year as of June 30, 2026, driven by a 62% increase in platform ARR, while non-platform ARR declined 17%. Total Software Dollar-Based Net Retention Rate was 109%, with platform software at 148% and non-platform software at 82%. These figures make the mix between platform and non-platform software an important operational focus.
Cash generation remained substantial. Net cash provided by operating activities was $380.4 million in the quarter, compared with $286.2 million in the prior-year period, while free cash flow was $370.3 million compared with $276.2 million. For the nine months ended June 30, 2026, FICO repurchased $ 3,045,992 (In thousands) of common stock. Long-term debt was $ 5,282,389 (In thousands) at June 30, 2026, and stockholders’ deficit was $ (4,097,135) (In thousands).
Management raised fiscal 2026 guidance. Revenue guidance increased from $2.45 billion to $2.53 billion, GAAP net income guidance increased from $825 million to $850 million, and GAAP EPS guidance increased from $35.60 to $36.86. Non-GAAP net income guidance increased from $946 million to $979 million, while non-GAAP EPS guidance increased from $40.45 to $42.43.
Management, verbatim
We delivered another quarter of strong performance, driven by the successful execution of our strategic priorities. We are pleased to announce that we are raising our full year guidance.
Will Lansing, chief executive officer
Not in the filing
stated, not guessed- Gross margin was not reported.
- GAAP or non-GAAP operating margin was not reported.
- A tax-rate percentage was not reported.
- Prior-quarter comparisons were not reported for the quarterly metrics.
- Quarterly share repurchases were not reported.
- Dividends were not reported.
- Previous-release outlook was not provided, so comparison of reported results with prior guidance is unavailable.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC 8-K (Item 2.02) reporting FICO’s Q3 FY2026 results and updated FY2026 guidance.
Ticker impact
FICO reported Q3 FY2026 GAAP EPS of $10.45 and raised full-year guidance to $2.53B revenue and $36.86 GAAP EPS.
Likely positive bias for the next session and into guidance digestion, with follow-through dependent on whether ARR and retention trends persist.
The filing is a primary earnings and guidance update (8-K Item 2.02) with specific updated revenue and EPS targets, plus segment growth and ARR/retention metrics.
Market effects
Signals continued demand strength for analytics and credit decisioning software, potentially supportive for other fintech analytics vendors.
Limited direct regional read-through; primarily US-listed software/fintech sentiment.
Global analytics footprint and segment mix suggest international credit and risk-management spending remains resilient.
Counterpoint
Guidance raise may already be partially priced; investors may focus on the sustainability of B2B unit pricing and platform ARR mix shift.
Key entities
- companyFAIR ISAAC CORP
FICO, global analytics software provider, reported Q3 FY2026 results and raised FY2026 guidance.
