Fair Isaac Corporation (FICO) Earnings & Analysis

Latest quarter

Fair Isaac reported Q3 FY2026 revenue of $674.2 million, up 25.7% from Q3 FY2025. The company’s revenue was below the consensus of $679.3 million, or −0.75% against that measure. Fair Isaac reported adjusted EPS, as the consensus counts it, of $12.18, above the $12.02 consensus by 1.33%.

The filing shows Scores segment revenue of $459.0 million for Q3 FY2026, while the company said higher mortgage-origination score unit pricing primarily drove the increase in business-to-business Scores revenue. Fair Isaac said Software revenue rose because on-premises and SaaS revenue increased, partly offset by lower professional-services revenue; the company attributed the SaaS increase largely to Platform growth.

Fair Isaac reported a gross margin of 87.1%, compared with 83.7% a year earlier, and an operating margin of 53.8%, compared with 48.9%. The company reported free cash flow of $370.3 million, up 34.1% from Q3 FY2025.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Will Lansing said elevated interest rates and affordability challenges were keeping mortgage originations below historical norms. He said Q3 Scores revenue was $459 million, up 41% from the prior year, with business-to-business Scores revenue as the principal contributor, while Software revenue was $215 million, up 2%.

Steve Weber said mortgage-origination score volumes rose by a low-single-digit percentage from a year earlier, while mortgage-origination revenue rose 97%, primarily reflecting a higher unit price. Weber said Software ARR was $816 million, up 10%, and Platform ARR was $413 million, up 62%; he attributed Platform retention to new use cases, higher use of existing cases and migrations. He also said platform revenue exceeded non-platform revenue for the first time in the company’s history.

Lansing said Fair Isaac’s investments were directed toward developing and distributing intellectual property, including FICO Platform and related technologies, while using cloud providers for scalability. He said the company expected general availability of its next-generation FICO Platform, including an enterprise fraud solution, later in calendar 2026. Weber said fourth-quarter operating expenses were expected to be modestly above Q3 levels because of marketing for the Accenture partnership and anticipated one-time restructuring charges, while fourth-quarter interest expense was expected to rise from Q3 after the June term-loan issuance.

Asked about score competition and whether the company was seeing volume loss, Lansing said Fair Isaac was not seeing volume loss and said lenders seeking to compare scores would need to pull both scores. He said the Mortgage Direct Licensing Program remained under GSE review; Fair Isaac had direct-license agreements covering about 60% of mortgage volume and was negotiating with resellers that could take coverage closer to 90%. Lansing said usage of the performance model could not be discussed because it was not available pending certification.

Guidance

Fair Isaac raised its FY2026 revenue guidance from $2.45 billion to $2.53 billion. The company raised GAAP net income guidance from $825 million to $850 million and GAAP EPS guidance from $35.60 to $36.86. Fair Isaac raised non-GAAP net income guidance from $946 million to $979 million and non-GAAP EPS guidance from $40.45 to $42.43. Weber said the company expected an FY2026 operating tax rate of 25% to 26% and an effective tax rate of around 24%.