Fair Isaac Q1 Earnings Top Estimates, Strong Scores Drive Up Sales Y/Y

Fair Isaac FICO reported first-quarter fiscal 2026 non-GAAP earnings of $7.33 per share, which surpassed the Zacks Consensus Estimate by 5.54% and jumped 26.6% year over year.

Revenues of $512 million beat the consensus mark by 2.76% and increased 16.6% year over year. The Americas, EMEA, and Asia Pacific contributed 88%, 8%, and 4% to total revenues, respectively. Scores (59.5% of revenues) increased 29.2% year over year to $304.5 million.

FICO’s Top-Line Details

Software revenues, which include Fair Isaac’s analytics and digital decisioning technology, as well as associated professional services, increased 1.5% year over year to $207.4 million.

Software Annual Recurring Revenues (ARR) increased 5% year over year to $766 million, consisting of 33% platform ARR growth but an 8% decline in non-platform ARR. Software Dollar-Based Net Retention Rate was 103% in the fiscal first quarter, with platform software at 122% and non-platform software at 91%. On-premises and SaaS Software (36.8% of revenues) increased 1.2% year over year to $188.2 million. Professional services (3.8% of revenues) were $19.2 million, up 5% year over year. 

Fair Isaac Corporation Price, Consensus and EPS Surprise

Fair Isaac Corporation price-consensus-eps-surprise-chart | Fair Isaac Corporation Quote

Scores include FICO’s business-to-business (B2B) scoring solutions and business-to-consumer (B2C) scoring solutions. B2B revenues increased 36% year over year, driven primarily by higher unit prices and an increase in volume of mortgage originations. B2C revenues rose 5% year over year due to increased revenues from myFICO.com business and indirect channel partners.

Mortgage originations revenues rose 60% year over year. Auto originations revenues increased 21% year over year. Credit card, personal loan, and other origination revenues increased 10% year over year.

FICO’s Operating Details

Research and development expenses, as a percentage of revenues, contracted 50 basis points (bps) on a year-over-year basis to 9.7%.

Selling, general, and administrative expenses, as a percentage of revenues, decreased 160 bps year over year to 27.5%.

Non-GAAP Operating margin was 45.7% in the fiscal first quarter of 2026 compared with 40.8% in the year-ago quarter.

Adjusted EBITDA increased 26.5% year over year to $282.2 million in the reported quarter. The adjusted EBITDA margin in the fiscal first quarter of 2026 was 55.1% compared with 50.7% in the fiscal first quarter of 2025.

FICO’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, FICO had $162 million in cash and cash equivalents compared with $134 million as of Sept. 30, 2025. Total debt was $3.19 billion. 

Cash flow from operations was $174 million in the fiscal first quarter compared with $223.6 million in the prior quarter. Free cash flow was $165.3 million in the reported quarter compared with $210.8 million reported in the prior quarter.

In the fiscal first quarter, FICO repurchased 95K shares.

FICO Reiterates Fiscal 2026 Guidance

For fiscal 2026, FICO anticipates revenues of $2.35 billion.

Non-GAAP earnings are projected to be $38.17 per share.

FICO’s Zacks Rank & Other Stocks to Consider

Currently, FICO carries a Zacks Rank #2 (Buy). 

Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Arista Networks ANET, Advanced Energy AEIS, and Amkor Technology AMKR. While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Arista Networks and Advanced Energy carry a Zacks Rank 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Arista Networks have gained 27.6% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12

Shares of Advanced Energy have gained 85.4% in the trailing six-month period. Advanced Energy is slated to report fourth-quarter 2025 results on Feb. 10.

Amkor Technology shares have surged 103.2% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9. 

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This article originally published on Zacks Investment Research (zacks.com).

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