Fair Isaac Corporation (FICO) | Investment Case

1. Company Snapshot

1.a. Company Description

Fair Isaac Corporation develops analytic, software, and data management products and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.It operates through two segments, Scores and Software.The Software segment offers pre-configured decision management solution designed for various business problems or processes, such as marketing, account origination, customer management, customer engagement, fraud detection, financial crimes compliance, collection, and marketing, as well as associated professional services.

This segment also provides FICO Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by customers to address a wide range of business use cases.The Scores segment provides business-to-business scoring solutions and services for consumers that give clients access to analytics to be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings.Fair Isaac Corporation markets its products and services primarily through its direct sales organization and indirect channels, as well as online.

The company was formerly known as Fair Isaac & Company, Inc.and changed its name to Fair Isaac Corporation in July 1992.Fair Isaac Corporation was founded in 1956 and is headquartered in Bozeman, Montana.

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1.b. Last Insights on FICO

Breaking News: Fair Isaac Corporation reported its Q2 2026 earnings, with revenue surging 39% year-over-year to $692 million, driven by booming mortgage activity and strong Scores segment growth. GAAP net income rose 63% to $264 million, and GAAP earnings per share jumped 69% to $11.14. The company beat estimates, prompting a raised full-year outlook. Executives addressed competition from VantageScore, stating FICO's pricing is on par. Analysts recommend a buy, citing the company's record growth and strategic moves, with Fair Isaac's strong performance and outlook.

1.c. Company Highlights

Last Price	1060
Change Percentage	2.37%
Open	1050.65
Previous Close	1035.5
Market Cap ( Millions)	24582
Volume	236296
Year High	2217.6
Year Low	870.01
M A 50	1144.0
M A 200	1472.19

FCF Yield	3.63%
Dividend Yield	0.00%
ROE	-43.08%
Debt / Equity	-173.99%
Net Debt / EBIDTA	295.63%
Price To Book	-11.92
Price Earnings Ratio	32.97
Price To FCF	27.54
Price To sales	10.9
EV / EBITDA	24.1

2. FICO Q2 Beats, Drives 2026 Guidance Surge

FICO posted Q2 revenue of $692 million, up 39% YoY, and GAAP net income of $264 million, a 63% jump, yielding $11.14 EPS versus consensus $10.97. Non‑GAAP net climbed 54% to $297 million, $12.50 EPS, beating estimates. Free cash flow hit $214 million while the company returned $605 million to shareholders via share buybacks. Updated fiscal‑2026 revenue guidance of $2.45 billion reflects a 23% lift, and the company’s valuation sits at a P/E of 31.42, P/S of 10.62, and EV/EBITDA of 23.61, underscoring robust profitability and a high ROIC of 53.2%.

Publication Date: Apr -29

                                    📋 Highlights
                                    Revenue & Profit Surge:
                                                Q2 revenues hit $692M (+39% YoY), with GAAP net income at $264M (+63%) and GAAP EPS of $11.14 (+69%).
Scores Segment Growth:
                                                Scores revenue reached $475M (+60% YoY), driven by 127% mortgage revenue growth amid low interest rates.
Non-GAAP Performance:
                                                Non-GAAP net income rose to $297M (+54%), with EPS at $12.50 (+60%).
Capital Returns:
                                                Free cash flow of $214M enabled $605M in share repurchases (484,000 shares), signaling strong liquidity.
2026 Guidance Raised:
                                                Fiscal 2026 revenue target raised to $2.45B (+23% YoY), reflecting confidence in market share and pricing strategies.

                                

Scores Segment Growth

Scores revenue surged 60% to $475 million, driven by a 127% rise in mortgage originations, showcasing the segment’s strong traction in the nonconforming market.

Software Segment Performance

Software revenue rose 7% to $217 million, with platform income up 54%, reflecting the firm’s successful land‑and‑expand strategy and solid ARR expansion.

Pricing Strategy & 10T Adoption

FICO introduced a $0.99 upfront fee for its new 10T score, aligning pricing with VantageScore and encouraging lenders to adopt the performance‑based model.

Direct License Program Rollout

Three of the top five resellers have signed on; the program awaits FHFA approval, but FICO anticipates full rollout without volume loss.

Mortgage Revenue Surge

Mortgage revenue grew 127% due to volume gains and low rates, while the company maintains neutrality between per‑score and performance pricing models.

Software Bookings & ARR

Strong bookings and ARR growth, especially in financial services, signal continued momentum in the software business, even as non‑platform revenue tapers.

Market Share vs VantageScore

3. NewsRoom

First-of-Its-Kind Independent Study Finds FICO® Score 10T the Most Predictive Credit Score for Mortgage Lending

16:00

Source: businesswire.com

Is This Financial Powerhouse a Bargain Hiding in Plain Sight?

12:51

Source: fool.com

FICO to Present at Upcoming Investor Conference on May 5th

Apr -29

Source: businesswire.com

Fair Isaac Q2 Earnings Beat Estimates on Scores, Revenue Up Y/Y

Apr -29

Source: zacks.com

FICO Isn't Worried About VantageScore. Are Investors?

Apr -29

Source: barrons.com

FICO UK Credit Card Market Report: February 2026

Apr -29

Source: businesswire.com

Fair Isaac Corp (FICO) Q2 2026 Earnings Call Highlights: Record Growth and Strategic Moves

Apr -29

Source: gurufocus.com

Fair Isaac Corporation (FICO) Q2 2026 Earnings Call Transcript

Apr -29

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.85%)

6. Segments

Scores

Expected Growth: 10.2%

Growing demand for credit scores drives Fair Isaac Corporation's growth, fueled by increasing adoption in emerging markets, rising regulatory requirements, and the need for efficient risk assessment.

Software

Expected Growth: 7.3%

Increasing demand for fraud and risk management solutions, coupled with the adoption of advanced analytics and decision management platforms, drives growth in Fair Isaac Corporation's software solutions for financial services and other industries.

7. Detailed Products

FICO Score

A three-digit credit score that summarizes an individual's credit history and creditworthiness

Decision Management Suite

A platform that enables organizations to automate and optimize decision-making processes

Falcon Fraud Manager

A fraud detection and prevention solution that identifies and prevents fraudulent transactions

FICO Origination Manager

A solution that streamlines and automates the loan origination process

FICO Customer Communication Services

A solution that enables personalized customer communication and engagement

FICO Analytic Modeler

A predictive analytics and modeling solution that enables organizations to build and deploy models

FICO Decision Central

A cloud-based decision management platform that enables organizations to make data-driven decisions

8. Fair Isaac Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Fair Isaac Corporation's credit scoring models are highly specialized and difficult to replicate, reducing the threat of substitutes.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative credit scoring models, Fair Isaac Corporation's strong brand recognition and market presence mitigate this power.

Bargaining Power Of Suppliers

Fair Isaac Corporation has a diverse supplier base, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

The high barriers to entry in the credit scoring market, including the need for significant investment in data and analytics, reduce the threat of new entrants.

Intensity Of Rivalry

While there is some rivalry in the credit scoring market, Fair Isaac Corporation's strong market position and brand recognition help to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	157.45%
Debt Cost	6.53%
Equity Weight	-57.45%
Equity Cost	10.13%
WACC	4.47%
Leverage	-274.07%

11. Quality Control: Fair Isaac Corporation passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Intuit

A-Score: 5.6/10

Value: 1.0

Growth: 8.1

Quality: 8.6

Yield: 1.0

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

Salesforce

A-Score: 5.0/10

Value: 2.3

Growth: 8.9

Quality: 8.3

Yield: 1.0

Momentum: 2.5

Volatility: 7.0

1-Year Total Return ->

AppLovin

A-Score: 4.8/10

Value: 0.0

Growth: 9.7

Quality: 8.4

Yield: 0.0

Momentum: 9.0

Volatility: 1.7

1-Year Total Return ->

Cadence Design Systems

A-Score: 4.6/10

Value: 0.0

Growth: 7.2

Quality: 8.5

Yield: 0.0

Momentum: 6.0

Volatility: 6.0

1-Year Total Return ->

ServiceNow

A-Score: 4.4/10

Value: 0.3

Growth: 9.0

Quality: 7.8

Yield: 0.0

Momentum: 3.0

Volatility: 6.0

1-Year Total Return ->

FICO

A-Score: 4.2/10

Value: 2.0

Growth: 8.3

Quality: 7.4

Yield: 0.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-0.77%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

4.47%

Fair Isaac Corporation - US3032501047

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FICO

1.c. Company Highlights

Strong Momentum

Better Quality

Higher Growth

Earnings Beats

Revenues Beats

Earnings Miss

Revenues Miss

Less Volatile

Expensive

Fairly Valued

Stable Momentum

Weak Momentum

2. FICO Q2 Beats, Drives 2026 Guidance Surge

Scores Segment Growth

Software Segment Performance

Pricing Strategy & 10T Adoption

Direct License Program Rollout

Mortgage Revenue Surge

Software Bookings & ARR

Market Share vs VantageScore

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.85%)

6. Segments

Scores

Expected Growth: 10.2%

Software

Expected Growth: 7.3%

7. Detailed Products

FICO Score

Decision Management Suite

Falcon Fraud Manager

FICO Origination Manager

FICO Customer Communication Services

FICO Analytic Modeler

FICO Decision Central

8. Fair Isaac Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Fair Isaac Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1060.0$

Current Price

1060$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA