Fair Isaac Corporation’s fourth quarter was marked by continued momentum in its core credit scoring business and steady progress in its software segment. Management attributed the robust revenue growth to a surge in mortgage originations, particularly within business-to-business (B2B) Scores, and the successful adoption of new licensing models. CEO William Lansing emphasized, “B2B Scores were the key driver of growth, and we also saw continued growth in B2C Scores.” Additionally, the company highlighted the expansion of its Direct Licensing Program and sustained demand for its FICO Score 10T as significant contributors to quarterly performance.
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Fair Isaac Corporation (FICO) Q4 CY2025 Highlights:
- Revenue: $512 million vs analyst estimates of $502.7 million (16.4% year-on-year growth, 1.8% beat)
- Adjusted EPS: $7.33 vs analyst estimates of $7.08 (3.5% beat)
- Adjusted EBITDA: $282.2 million vs analyst estimates of $270 million (55.1% margin, 4.5% beat)
- The company reconfirmed its revenue guidance for the full year of $2.35 billion at the midpoint
- Operating Margin: 45.7%, up from 40.8% in the same quarter last year
- Annual Recurring Revenue: $766 million vs analyst estimates of $765.9 million (5% year-on-year growth, in line)
- Market Capitalization: $31.5 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Fair Isaac Corporation’s Q4 Earnings Call
- Manav Patnaik (Barclays): Asked about the timing and significance of FICO Score 10T adoption. CFO Steven Weber replied there is strong interest, especially in nonconforming markets, but no set timeline for broader agency adoption.
- Jason Haas (Wells Fargo): Inquired about the forthcoming LLPA grids and potential consumer impacts. CEO William Lansing said there is no clear timing and outlined key challenges, including adverse selection and system readiness.
- Ashish Sabadra (RBC): Sought clarity on when Direct License Program resellers will go live. Lansing emphasized the process is meticulous, with no firm timeline, but confirmed advanced integration and imminent launches.
- Surinder Thind (Jefferies): Asked about expanding software platform reach beyond financial services. Lansing acknowledged Phase 2 expansion efforts, with the platform designed for broader verticals, but direct sales remain focused on financial institutions.
- Alexander Hess (JPMorgan): Probed the sustainability of high growth in platform ARR. Lansing noted that while growth rates fluctuate, the current trajectory is likely sustainable, driven by rising customer appetite and migration.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will track (1) the timeline for full deployment of the Direct License Program among major resellers, (2) regulatory milestones governing the acceptance and rollout of FICO Score 10T and associated LLPA grids, and (3) sustained momentum in software platform migrations and annual recurring revenue expansion. We will also monitor the impact of macroeconomic trends on mortgage and consumer lending activity.
Fair Isaac Corporation currently trades at $1,335, down from $1,526 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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