Fair Isaac Corporation

FICO reported Q3 revenue of $674 million, up 26% from last year. GAAP net income was $237 million, up 30%, with GAAP EPS of $10.45, up 41%; non-GAAP net income was $277 million, up 31%, with non-GAAP EPS of $12.18, up 42%. Free cash flow was $370 million in the quarter and $961 million over the last four quarters, up 28%. Scores revenue was $459 million, up 41%, and Software revenue was $215 million, up 2%. Non-GAAP operating margin was 62%, up 479 basis points year over year. Full-year guidance was raised to revenue of $2.53 billion, GAAP net income of $850 million, GAAP EPS of $36.86, non-GAAP net income of $979 million, and non-GAAP EPS of $42.43. Management said Q4 operating expenses will be modestly higher than Q3 due to front-end loaded marketing for the Accenture partnership and some one-time restructuring charges, and Q4 interest expense should be higher because of the June $1.5 billion term loan.

Will Lansing framed the quarter as another strong one and emphasized that the company is increasing fiscal 2026 guidance. He highlighted strategic momentum in FICO Score 10T, UltraFICO, the mortgage direct licensing program, and the FICO Platform, while stressing that AI adoption and governed decisioning are creating long-term demand. His tone was confident but pragmatic: he repeatedly noted that mortgage is still under pressure from rates and affordability, but said the company is executing with discipline and sees continued growth opportunities beyond mortgage.

Steve Weber emphasized the mix of growth in Scores and platform-driven software metrics. He said Scores B2B revenue rose 49% year over year, or 59% when normalized for a prior-year insurance score renewal, with mortgage origination revenues up 97%; in Software, ACV bookings were $29 million, trailing-12-month ACV bookings were $128 million, up 39%, and total ARR was $816 million, up 10%, with platform ARR up 62% to $413 million. He also noted non-GAAP operating margin of 62%, cash and marketable investments of $305 million, total debt of $5.58 billion at a 5.64% weighted average interest rate, and said the near-term use of cash will be paying down debt before returning more capital via buybacks.

Analysts focused heavily on mortgage scoring dynamics, including VantageScore adoption, gaming, and the timing of the direct licensing program. Management said it is still waiting on certification from one GSE for the DLP to go live, that reseller agreements already cover about 60% of mortgage volume, and that there is strong interest in the performance model and funding fee component. On VantageScore, Will Lansing said the company is seeing gaming behavior in the market but not volume loss, and argued lenders pulling both scores to game the system can make Vantage additive rather than substitutive. Questions also probed software divergence and capital return; management said platform growth should keep accelerating, legacy migrations will continue, and buybacks are likely paused in the near term as cash is directed to debt reduction.