Investor Relations

View annual reports, stock information, press releases and updated financials.

Press Release Details

[Go Back]

FICO Announces Earnings of $2.12 per Share for Third Quarter Fiscal 2019

July 31, 2019 at 4:15 PM EDT
Revenue of $314 million vs. $255 million in prior year

SAN JOSE, Calif., July 31, 2019 /PRNewswire/ -- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its third fiscal quarter ended June 30, 2019.

FICO Corporate logo.  (PRNewsFoto/FICO)

Third Quarter Fiscal 2019 GAAP Results
Net income for the quarter totaled $64.2 million, or $2.12 per share, versus $29.7 million, or $0.95 per share, in the prior year period.

Net cash provided by operating activities for the quarter was $68.3 million versus $85.1 million in the prior year period.

Third Quarter Fiscal 2019 Non-GAAP Results
Non-GAAP Net Income for the quarter was $75.6 million versus $44.5 million in the prior year period. Non-GAAP EPS for the quarter was $2.50 versus $1.43 in the prior year period. Free cash flow for the quarter was $60.8 million versus $72.0 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.

Third Quarter Fiscal 2019 GAAP Revenue
The company reported revenues of $314.2 million for the quarter as compared to $255.0 million reported in the prior year period. 

"I'm pleased to announce another record quarter," said Will Lansing, chief executive officer. "We delivered strong top- and bottom-line growth, and have strong momentum heading into our fourth quarter."

Revenues for the third quarter of fiscal 2019 across each of the company's three operating segments were as follows:

  • Applications revenues, which include the company's preconfigured decision management applications and associated professional services, were $165.6 million in the third quarter, compared to $138.7 million in the prior year quarter, an increase of 19%, due primarily to increased license sales and transactional volumes.
  • Scores revenues, which include the company's business-to-business (B2B) scoring solutions and associated professional services, and business-to-consumer (B2C) service, were $115.1 million in the second quarter, compared to $90.8 million in the prior year quarter, an increase of 27%. B2B revenue increased 36% and B2C revenue increased 8% from the prior year quarter.
  • Decision Management Software revenues, which include Blaze Advisor®, Xpress Optimization, Decision Management Platform and related professional services, were $33.5 million in the third quarter compared to $25.5 million in the prior year quarter, an increase of 31%, due primarily to increased license sales and SaaS subscription revenue.

Outlook 
The company is reiterating its previously provided guidance for fiscal 2019:


Fiscal 2019 Guidance

Revenues

$1.14 billion

GAAP Net Income

$173 million

GAAP EPS

$5.75

Non GAAP Net Income

$214 million

Non GAAP EPS

$7.12

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 today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to report its third quarter fiscal 2019 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 Event Calendar under Past Events through July 31, 2020.

About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 165 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, 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 helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.

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

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

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 Decision Management strategy and reengineering initiative, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial 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, material adverse developments in global economic conditions or in the markets we serve, and other risks described from time to time in FICO's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2018 and subsequent quarterly reports on Form 10-Q. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)






June 30,


September 30,


2019


2018




* As Adjusted

ASSETS:




Current assets:




     Cash and cash equivalents

$                 78,808


$                 90,023

     Accounts receivable, net

318,044


266,742

     Prepaid expenses and other current assets

38,212


39,624

          Total current assets

435,064


396,389





Marketable securities and investments

21,726


19,756

Property and equipment, net

52,900


48,837

Goodwill and intangible assets, net

807,446


815,426

Other assets

56,662


50,059


$            1,373,798


$            1,330,467





LIABILITIES AND STOCKHOLDERS' EQUITY:




Current liabilities:




     Accounts payable and other accrued liabilities

$                 47,900


$                 51,276

     Accrued compensation and employee benefits

88,543


84,292

     Deferred revenue

103,270


103,335

     Current maturities on debt

218,000


235,000

          Total current liabilities

457,713


473,903





Long-term debt

604,582


528,944

Other liabilities

43,186


40,183

          Total liabilities

1,105,481


1,043,030





Stockholders' equity

268,317


287,437


$            1,373,798


$            1,330,467


* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME 

(In thousands, except per share data)

(Unaudited)










Quarter Ended 


Nine Months Ended


June 30,


June 30,


2019


2018


2019


2018




* As Adjusted




* As Adjusted

Revenues:








     Transactional and maintenance

$           226,040


$           192,143


$         632,012


$           555,337

     Professional services

44,594


42,836


135,957


132,695

     License

43,615


20,014


86,770


55,582

        Total revenues

314,249


254,993


854,739


743,614









Operating expenses:








     Cost of revenues

87,215


79,011


248,849


232,936

     Research & development

36,972


32,483


110,082


93,976

     Selling, general and administrative

102,906


97,391


308,094


283,858

     Amortization of intangible assets

1,448


1,571


4,453


5,043

        Total operating expenses

228,541


210,456


671,478


615,813

Operating income

85,708


44,537


183,261


127,801

Other expense, net

(7,654)


(6,635)


(28,077)


(19,859)

Income before income taxes

78,054


37,902


155,184


107,942

Provision for income taxes

13,902


8,181


17,644


14,173

Net income

$             64,152


$             29,721


$         137,540


$             93,769

























Basic earnings per share:

$                 2.21


$                 1.00


$               4.74


$                 3.13

Diluted earnings per share:

$                 2.12


$                 0.95


$               4.54


$                 2.99









Shares used in computing earnings per share:








     Basic

28,967


29,708


29,000


29,924

     Diluted

30,292


31,161


30,295


31,341


* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)






Nine Months Ended


 June 30, 


2019


2018




* As Adjusted

Cash flows from operating activities:




 Net income 

$               137,540


$                 93,769

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




       Depreciation and amortization 

23,734


22,329

       Share-based compensation 

61,931


54,631

       Changes in operating assets and liabilities 

(59,682)


(3,931)

       Other, net 

1,413


(3,709)

          Net cash provided by operating activities 

164,936


163,089





 Cash flows from investing activities: 




 Purchases of property and equipment 

(18,170)


(24,220)

 Net activity from marketable securities 

(2,630)


(2,504)

          Net cash used in investing activities 

(20,800)


(26,724)





 Cash flows from financing activities: 




 Proceeds from revolving line of credit 

167,000


371,000

 Payments on revolving line of credit 

(109,000)


(480,000)

 Proceeds from issuance of senior notes 

-


400,000

 Payment on senior notes 

-


(131,000)

 Proceeds from issuances of common stock 

16,073


2,492

 Taxes paid related to net share settlement of equity awards 

(51,208)


(42,872)

 Repurchases of common stock 

(178,926)


(229,540)

 Other, net 

-


(7,869)

          Net cash used in financing activities 

(156,061)


(117,789)





 Effect of exchange rate changes on cash 

710


(4,265)





 Increase (decrease) in cash and cash equivalents 

(11,215)


14,311

 Cash and cash equivalents, beginning of period 

90,023


105,618

 Cash and cash equivalents, end of period 

$                 78,808


$               119,929


* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.

 

FAIR ISAAC CORPORATION

REVENUE BY SEGMENT

(In thousands)

(Unaudited)












Quarter Ended 


Nine Months Ended



June 30,


June 30,



2019


2018


2019


2018





* As Adjusted




* As Adjusted










Applications revenues:









     Transactional and maintenance


$       100,385


$         91,102


$        294,624


$        277,743

     Professional services


33,989


33,783


101,432


108,288

     License


31,263


13,773


59,055


39,297

          Total applications revenues


$       165,637


$       138,658


$        455,111


$        425,328










Scores revenues:









     Transactional and maintenance


$       112,949


$         89,876


$        300,133


$        243,323

     Professional services


392


559


1,994


1,613

     License


1,805


394


3,105


1,427

          Total scores revenues


$       115,146


$         90,829


$        305,232


$        246,363










Decision Management Software revenues:









     Transactional and maintenance


$         12,706


$         11,165


$          37,255


$          34,271

     Professional services


10,213


8,494


32,531


22,794

     License


10,547


5,847


24,610


14,858

          Total decision management software revenues

$         33,466


$         25,506


$          94,396


$          71,923










Total revenues:









     Transactional and maintenance


$       226,040


$       192,143


$        632,012


$        555,337

     Professional services


44,594


42,836


135,957


132,695

     License


43,615


20,014


86,770


55,582

          Total revenues


$       314,249


$       254,993


$        854,739


$        743,614


* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.

 

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)










Quarter Ended 


Nine Months Ended


June 30,


June 30,


2019


2018


2019


2018




* As Adjusted




* As Adjusted









GAAP net income

$                    64,152


$                    29,721


$                  137,540


$                    93,769

Amortization of intangible assets

1,448


1,571


4,453


5,043

Stock-based compensation expense

19,595


18,882


61,931


54,630

Income tax adjustments

(5,290)


(5,450)


(17,103)


(15,294)

Excess tax benefit

(4,289)


(1,635)


(20,023)


(14,697)

Tax Cuts and Jobs Act

-


1,436


-


6,906

Non-GAAP net income

$                    75,616


$                    44,525


$                  166,798


$                  130,357

















GAAP diluted earnings per share

$                        2.12


$                        0.95


$                        4.54


$                        2.99

Amortization of intangible assets

0.05


0.05


0.15


0.16

Stock-based compensation expense

0.65


0.61


2.04


1.74

Income tax adjustments

(0.17)


(0.17)


(0.56)


(0.49)

Excess tax benefit

(0.14)


(0.05)


(0.66)


(0.47)

Tax Cuts and Jobs Act

-


0.05


-


0.22

Non-GAAP diluted earnings per share

$                        2.50


$                        1.43


$                        5.51


$                        4.16









Free cash flow








Net cash provided by operating activities

$                    68,290


$                    85,079


$                  164,936


$                  163,089

Capital expenditures

(7,526)


(13,109)


(18,170)


(24,220)

Free cash flow

$                    60,764


$                    71,970


$                  146,766


$                  138,869


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


* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.



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 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 and dividends paid.  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 2019 Guidance



GAAP net income

$                                     173

Amortization of intangible assets

6

Stock-based compensation expense

85

Income tax adjustments

(25)

Excess tax benefit

(25)

Non-GAAP net income

$                                     214





GAAP diluted earnings per share

$                                    5.75

Amortization of intangible assets

0.20

Stock-based compensation expense

2.82

Income tax adjustments

(0.81)

Excess tax benefit

(0.83)

Non-GAAP diluted earnings per share

$                                    7.12


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 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 and dividends paid.  The presentation of these financial measuresis 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.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/fico-announces-earnings-of-2-12-per-share-for-third-quarter-fiscal-2019--300894144.html

SOURCE FICO

Investors/Analysts: Steve Weber, (800) 213-5542, investor@fico.com; or Media: Greg Jawski, Porter Novelli, (212) 601-8248, greg.jawski@porternovelli.com