stockrowWhat it does
Fair Isaac Corporation, known as FICO, sells credit scores and analytics software that help businesses make decisions about customers and transactions. Founded in 1956, the company is led by Chief Executive Officer William J. Lansing.
The FICO Score is a measure of consumer credit risk in the United States. Lenders use it when deciding whether to extend credit and how to manage existing accounts. FICO applies its algorithms to credit information held by consumer reporting agencies to produce scores; it generally does not collect or store the underlying consumer credit data itself. Consumers can also buy scores and credit-monitoring services through myFICO.com.
FICO’s software helps businesses make and automate decisions across processes such as opening accounts, managing customers and detecting fraud. Customers can use pre-configured products for specific tasks or configure their own applications with FICO Platform, which brings data, analytics and decision rules together. The software can run in the cloud or on customers’ own infrastructure.
Banks and other financial institutions are major users, but FICO also serves insurers, retailers, public agencies and organizations in other industries. Its software is available to business customers in more than 80 countries. FICO also provides scores outside the United States for consumer loans and, in some cases, small and medium business loans.
How it makes money
Fiscal 2026 revenue was $2.535 billion; fourth-quarter fiscal 2026 revenue was $657 million.
FICO has two reporting segments: Scores and Software. Scores generated $1.652 billion in fiscal 2026, while Software generated $883 million.
In the business-to-business Scores operation, lenders and other users generally pay consumer reporting agencies for each score generated. The agencies then pay FICO an associated fee. Revenue can therefore change with score volumes and unit prices. FICO also earns revenue from scores and related products sold indirectly to consumers and from subscriptions purchased directly through myFICO.com.
The Software segment sells analytics and decision-making tools, pre-configured applications and professional services. FICO typically sells software through multi-year subscriptions. Payments are based on usage measures such as accounts, transactions or decision-making use cases, often with contracted minimum payments. As customers add capabilities or use more of FICO Platform, they can generate additional subscription revenue.
FICO also sells implementation and configuration services, custom analytics and decision models. These professional services are priced by time and materials or at a fixed project fee. FICO expects professional services revenue to decline significantly in fiscal 2027 as it uses third-party partnerships and efficiencies in its platform.
Software revenue does not always follow the timing of customer payments. A significant portion of revenue from on-premises subscriptions is recognized when the software is first made available, while maintenance and usage fees are recognized over the contract. FICO uses annual recurring revenue to track its subscription agreements separately from that timing.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Scores | $1.2 billion | 58.7% | 27.1% |
| On-premises and SaaS software | $740.1 million | 37.2% | 4.05% |
| Professional services | $82.1 million | 4.13% | −5.07% |
Customers and how it sells
Financial services represented 92% of FICO’s total revenue in fiscal 2025. Its users include banks, credit card issuers, mortgage lenders and auto lenders. FICO also serves insurers, retailers, telecommunications providers, public agencies and consumers.
The consumer reporting agencies Experian, TransUnion and Equifax are both customers and distribution partners. FICO earns revenue under agreements with all three. The majority of scores are marketed and sold through consumer reporting agencies, while myFICO.com provides a direct route to consumers.
FICO primarily sells software through its own sales teams, organized by industry and geography. It also uses alliance partners and other resellers and expects indirect sales to grow as more capabilities become available on FICO Platform. Outside the United States, scores are sold through reporting agencies, other distributors and, in some cases, directly to large users.
The Americas accounted for 87.0% of fiscal 2025 revenue. FICO’s software is sold to business customers in more than 80 countries, while FICO Scores have been made available in over 40 countries. FICO has also developed client-specific versions of its score in over ten countries.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Americas | $1.7 billion | 87.0% | 19.5% |
| EMEA | $159.8 million | 8.03% | −5.74% |
| Asia Pacific | $98.7 million | 4.96% | 0.58% |
Suppliers and costs
FICO’s scoring business depends on credit information collected and maintained by Experian, TransUnion and Equifax. Its algorithms use that information to produce scores, while the agencies distribute the scores and pay FICO an associated fee. Except for product development using de-personalized data, FICO does not collect or store the consumer credit data used to calculate its scores.
FICO can deploy its software using third-party cloud services or customers’ own infrastructure. Its fraud models also use transaction data contributed by institutions participating in the FICO Falcon Intelligence Network. FICO protects its models and software through trade secrets, restrictions on access, patents and other intellectual-property measures.
Personnel and software development are part of its operating structure. FICO continues to invest development resources in moving software capabilities onto FICO Platform. Fiscal fourth-quarter 2026 operating expense included a $27 million restructuring charge for a workforce reduction. FICO plans to continue hiring for capabilities needed by its strategy and investing in AI tools, while relying on third-party partnerships and platform efficiencies in professional services.
- Revenue$2.0B
- Cost of revenue−$353.7M
- Research and development−$188.3M
- Selling, general and administrative−$513.0M
- Other operating costs−$10.9M
- Operating income$924.9M
Competitive position
FICO competes with in-house analytics teams, scoring-model builders, consumer reporting agencies and software providers. In credit scoring, VantageScore sells a competing product; the major U.S. reporting agencies are both partners and competitors. Experian and TransUnion also compete with FICO in services sold directly to consumers.
Competition in software varies by application. FICO names Experian, SAS and Feedzai among competitors in fraud solutions; Experian and Equifax in customer origination; and Pegasystems, IBM and SAS in decision platforms. FICO identifies technical performance, access to models and data, product functionality, price, service and reputation among the factors that affect competition.
It was reported on 26 October 2026 that VantageScore 4.0 was approved for loans backed by Fannie Mae and Freddie Mac. FICO said it saw no meaningful loss of mortgage origination volume to competition in its fiscal fourth quarter of 2026.
Our reading: FICO’s established use in U.S. credit decisions is a substantial source of competitive strength, although competing scores can challenge that position. Our reading: Integration into customers’ decision processes and the ability to add platform capabilities can support customer relationships, but competing software providers offer alternatives. Our reading: Proprietary models, data techniques and intellectual-property protections contribute to its position, although those protections do not prevent all competing products.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| VantageScore | Consumer credit scoring, including mortgages | High |
| Experian | Credit scores, consumer services, fraud and customer origination | High |
| Equifax | Credit scoring and customer origination | High |
| TransUnion | Credit scoring and direct-to-consumer credit services | High |
| SAS | Fraud, customer management and decision platforms | Medium |
| Pegasystems | Fraud, marketing services and decision platforms | Medium |
| IBM | Fraud solutions and decision platforms | Medium |
| Feedzai | Banking fraud solutions | Medium |
Growth opportunities
FICO’s growth plans include wider adoption of newer scores, broader distribution and more use of its software platform. In fiscal 2025, FICO Score 10 and 10 T gained traction in non-conforming mortgages and were approved for conforming mortgages by the Federal Housing Finance Agency for enterprise credit-scoring requirements.
FICO said its Score 10-T Adopter Program had grown to 84 lenders across conforming and non-conforming mortgage markets by its fiscal fourth quarter of 2026. It also said it had signed direct licensing agreements with reseller partners representing about 73% of mortgage reseller volume. FICO introduced its Preferred Program through participating resellers; enrolled lenders and brokers receive a bundle of classic FICO Score and FICO Score 10T, with no 2027 wholesale mortgage price increase.
In software, FICO’s strategy is to move substantially all current software products onto FICO Platform and expand sales as customers add capabilities and use cases. FICO also expects indirect channels to reach more medium-sized businesses. It made its next-generation platform generally available and launched enterprise fraud solutions in October 2026.
Platform annual recurring revenue grew in fiscal fourth-quarter 2026. FICO said growth reflected new customer wins, expanded use cases and volumes, as well as migrations from non-platform products. Total software annual recurring revenue was $851 million, up 14%.
- $1.3BFY2021
- $1.4BFY2022
- $1.5BFY2023
- $1.7BFY2024
- $2.0BFY2025
- $2.5BFY2026 guidance
Structural risks
- Competition and pricing: FICO faces competing scores and software from outside providers and customers’ in-house teams. It is transitioning to customized mortgage pricing and said the outcomes of negotiations and mortgage market challenges were uncertain; it was not providing fiscal 2027 guidance at that time.
- Customer and channel concentration: Experian, TransUnion and Equifax collectively accounted for 51.0% of fiscal 2025 revenue. FICO identifies loss of key customers and industry consolidation as risks.
- Mortgage demand: Elevated interest rates and affordability challenges are keeping mortgage originations below historical norms, FICO said. Fiscal fourth-quarter 2026 mortgage origination volumes declined from the prior year.
- Regulation and approvals: Credit scoring, consumer data and AI are subject to laws and regulation. FICO identifies an inability to obtain regulatory approvals for products, including credit score models, as a risk.
- Software execution and technology: FICO may not execute its software strategy successfully. Its risks include failure to adopt cloud technologies, changes in AI and inability to obtain or use key data.
- Legal and debt obligations: Fiscal fourth-quarter 2026 expenses included a $65 million accrual for a proposed settlement of a Scores antitrust class action. Total debt at the end of the quarter was $5.26 billion.
Bottom line
Our reading
FICO combines a transaction-based credit-scoring business with subscription software for automating business decisions. Our reading: Its established position in credit scoring and expanding platform give it distinct sources of revenue, but the business remains exposed to a concentrated group of reporting-agency partners and to competition and regulatory change in mortgage scoring. The platform’s growth also depends on continuing to win customers and expand usage as older products migrate.