FICO Q3 Earnings Beat Estimates, Strong Scores Drive Up Sales Y/Y

Fair Isaac FICO reported third-quarter fiscal 2025 non-GAAP earnings of $8.57 per share, which surpassed the Zacks Consensus Estimate by 10.87% and jumped 37.1% year over year.Revenues of $536.4 million beat the consensus mark by 3.4% and increased 19.8% year over year. The Americas, EMEA and Asia Pacific contributed 87%, 8% and 5% to total revenues, respectively. Scores (60.5% of revenues) increased 34.3% year over year to $324.3 million.FICO’s Top-Line DetailsSoftware revenues, which include Fair Isaac’s analytics and digital-decisioning technology, as well as associated professional services, increased 2.8% year over year to $212.1 million.Software Annual Recurring Revenues (ARR) increased 4% year over year, consisting of 18% platform ARR growth and a 2% decline in non-platform ARR. Software Dollar-Based Net Retention Rate was 103% in the fiscal third quarter, with platform software at 115% and non-platform software at 97%. On-premises and SaaS Software (35% of revenues) increased 2.2% year over year to $187.9 million. Professional services (4.5% of revenues) were $24.2 million, up 7% year over year. Scores include FICO’s business-to-business (B2B) scoring solutions and business-to-consumer (B2C) scoring solutions. B2B revenues increased 42% year over year, driven primarily by higher unit prices, an increase in volume of mortgage originations and a multi-year license renewal in the U.S. B2C revenues increased 6% year over year, aided by an increase in royalties derived from scores sold indirectly through credit reporting agencies.Mortgage-originations revenues increased 53% year over year. Auto-originations revenues increased 23% year over year. Credit card, personal loan and other origination revenues are up 3% year over year.Fair Isaac Corporation Price, Consensus and EPS Surprise Fair Isaac Corporation price-consensus-eps-surprise-chart | Fair Isaac Corporation QuoteFICO continues to advance financial inclusion on a global scale. In the third quarter of fiscal 2025, the company officially launched its FICO Score10 BNPL and FICO Score10T BNPL models, integrating Buy-Now-Pay-Later data into credit scoring. It is also driving strong adoption of FICO Score 10 T for non-GSE loans and is seeing promising outcomes from the early adopter program.FICO’s Operating DetailsResearch and development expenses, as a percentage of revenues, contracted 110 basis points (bps) year over year to 8.8%.Selling, general and administrative expenses, as a percentage of revenues, decreased 200 bps year over year to 25.9%.Adjusted EBITDA increased 31.9% year over year to $312.3 million in the reported quarter. The adjusted EBITDA margin in the fiscal third quarter of 2025 was 58.2% compared with 52.9% in the fiscal third quarter of 2024.FICO’s Balance Sheet & Cash FlowAs of June 30, 2025, FICO had $189 million in cash and cash equivalents, and total debt was $2.8 billion. Cash flow from operations was $286.2 million in the fiscal third quarter compared with $213.3 million in the prior-year period. Free cash flow was $276.2 million for the reported quarter compared with $205.7 million reported in the prior-year period.In the fiscal third quarter, FICO repurchased 284K shares.FICO Reiterates Fiscal 2025 GuidanceFor fiscal 2025, FICO anticipates revenues of $1.98 billion.Non-GAAP earnings are projected to be $29.15 per share.FICO’s Zacks Rank & Stocks to ConsiderCurrently, FICO has a Zacks Rank #3 (Hold). CommScope COMM, Watts Water Technologies WTS and CDW CDW are some better-ranked stocks that investors can consider in the broader sector. While CommScope sports a Zacks Rank #1 (Strong Buy), Watts Water Technologies and CDW carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.CommScope shares have gained 59.3% year to date. COMM is set to report its second-quarter 2025 results on Aug. 7.Watts Water Technologies' shares have appreciated 28.3% year to date. WTS is set to report its second-quarter 2025 results on Aug. 6.CDW shares have increased 1% year to date. CDW is set to report its second-quarter 2025 results on Aug. 6.One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fair Isaac Corporation (FICO): Free Stock Analysis Report Watts Water Technologies, Inc. (WTS): Free Stock Analysis Report CommScope Holding Company, Inc. (COMM): Free Stock Analysis Report CDW Corporation (CDW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks