Fair Isaac Corporation ((FICO)) has held its Q2 earnings call. Read on for the main highlights of the call.
FICO’s recent earnings call conveyed a generally positive sentiment, underscored by robust financial performance and notable growth in key segments. The company highlighted significant revenue and net income increases, particularly driven by its Scores segment. While there were some challenges in the Software segment and macroeconomic factors affecting usage, the overall sentiment was optimistic, with highlights outweighing the lowlights.
Strong Revenue and Income Growth
FICO reported impressive financial results for Q2 2025, with revenues reaching $499 million, marking a 15% increase from the previous year. The company’s GAAP net income rose by 25% to $163 million, and GAAP earnings per share increased by 28% to $6.59. These figures underscore FICO’s strong financial health and growth trajectory.
Scores Segment Performance
The Scores segment was a standout performer, with revenues increasing by 25% to $297 million. This growth was primarily driven by a 31% rise in B2B revenues, fueled by a substantial 48% increase in mortgage origination revenues. This segment continues to be a key driver of FICO’s overall success.
Free Cash Flow Growth
FICO’s free cash flow also saw significant growth, with $65 million generated in Q2 and $677 million over the last four quarters. This represents a 45% increase over the prior trailing 12-month period, highlighting the company’s strong cash generation capabilities.
Innovative Product Developments
FICO continues to innovate, announcing the Kenya-specific FICO score and advancing financial literacy initiatives. The FICO Score 10 T adoption program showed strong results, with significant client engagement in mortgage originations, demonstrating the company’s commitment to product development and client engagement.
Strategic Partnerships
FICO established new strategic partnerships with Fujitsu in Japan and dacadoo in the life insurance industry. These partnerships aim to enhance digital transformation and precision in underwriting, reflecting FICO’s strategic focus on expanding its global footprint and technological capabilities.
Software Segment Slower Growth
The Software segment experienced slower growth, with revenues increasing by only 2% to $202 million. Professional services declined by 9%, and there were usage headwinds in both platform and non-platform categories, indicating challenges in this segment.
Challenges with Non-Platform ARR
Non-platform ARR declined by 3%, reflecting macroeconomic factors affecting customer usage and outreach programs. This highlights some of the challenges FICO faces in maintaining growth across all segments.
Economic Uncertainty Impact
The macroeconomic environment remains uncertain, with some customers delaying or downsizing outreach programs due to volatility. This economic uncertainty poses challenges to FICO’s growth, particularly in the Software segment.
Forward-Looking Guidance
FICO’s forward-looking guidance remains optimistic, with the company reiterating its fiscal 2025 guidance amidst solid performance. The company reported a 15% increase in second-quarter revenue compared to the prior year, with significant growth in net income and earnings per share. FICO maintains confidence in its strategic initiatives and financial prospects for the remainder of the fiscal year.
In summary, FICO’s earnings call reflected a positive outlook, driven by strong financial performance and growth in key segments. While challenges exist, particularly in the Software segment, the company’s strategic initiatives and innovative developments position it well for continued success. The overall sentiment from the call was optimistic, highlighting FICO’s resilience and growth potential.