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FICO Announces Earnings of $2.33 per Share for Second Quarter Fiscal 2021

May 5, 2021 at 4:15 PM EDT
Revenue of $331 million vs. $308 million in prior year

SAN JOSE, Calif., May 5, 2021 /PRNewswire/ -- FICO (NYSE: FICO), a leading predictive analytics and decision management software company, today announced results for its second fiscal quarter ended March 31, 2021.

Second Quarter Fiscal 2021 GAAP Results
Net income for the quarter totaled $68.7 million, or $2.33 per share, versus $58.3 million, or $1.94 per share, in the prior year period.

Net cash provided by operating activities for the quarter was $153.5 million versus $61.5 million in the prior year period.

Second Quarter Fiscal 2021 Non-GAAP Results
Non-GAAP Net Income for the quarter was $90.2 million versus $64.3 million in the prior year period. Non-GAAP EPS for the quarter was $3.06 versus $2.14 in the prior year period. Free cash flow for the quarter was $152.3 million versus $54.8 million in the prior year period. The Non-GAAP financial measures are described in the financial table captioned "Non-GAAP Results" and are reconciled to the corresponding GAAP results in the financial tables at the end of this release.

Second Quarter Fiscal 2021 GAAP Revenue
The company reported revenues of $331.4 million for the quarter as compared to $308.0 million reported in the prior year period. 

"We had another great quarter, delivering strong revenues and record cash flows," said Will Lansing, chief executive officer. "And we are achieving this as we reduce our reliance on up-front license revenue."

Revenues for the second quarter of fiscal 2021 across each of the company's three operating segments were as follows:

  • Applications revenues, which include the company's decision management applications and associated professional services, were $129.5 million in the second quarter, compared to $140.3 million in the prior year period, a decrease of 8%, due primarily to decreased services and up-front license revenues.
  • Scores revenues, which include the company's business-to-business (B2B) scoring solutions and associated professional services, and business-to-consumer (B2C) service, were $168.7 million in the second quarter, compared to $129.1 million in the prior year period, an increase of 31%. B2B revenue increased 25%, driven largely by unit price increases and higher origination volumes. B2C revenue increased 47% from the prior year period due to higher volumes at myFICO.com, as well as through our partners.
  • Decision Management Software revenues, which include Blaze Advisor®, Xpress Optimization, Decision Management Platform and related professional services, were $33.2 million in the second quarter compared to $38.5 million in the prior year period, a decrease of 14%, due primarily to decreased up-front license and services revenues.

Company to Divest Debt Collection and Recovery Business
The company also announced today the signing of a definitive agreement to sell its Debt Collection and Recovery products to Constellation's Jonas Software operating group, a leading provider of enterprise management software solutions. Completion of the acquisition remains subject to mutually agreed closing conditions. FICO Debt Collection and Recovery products represent less than 10 percent of total company revenues. FICO expects the divestiture to have an immaterial impact on future operating profits. FICO intends to include the sale proceeds in a $200 million Accelerated Share Repurchase program following the close of the transaction.

Company to Host Conference Call
The company will host a webcast today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to report its second quarter fiscal 2021 results and provide various strategic and operational updates. The call can be accessed at FICO's web site at www.fico.com/investors. A replay of the webcast will be available at our Past Events page through May 5, 2022.

About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 165 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.

Learn more at http://www.fico.com

Join the conversation at https://twitter.com/fico & http://www.fico.com/en/blogs/

FICO is a registered trademark of Fair Isaac Corporation in the US and other countries.

Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the impact of COVID-19 on macroeconomic conditions and FICO's business, operations and personnel, the success of the Company's Decision Management strategy and reengineering initiative, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to protect such data, the failure to realize the anticipated benefits of any acquisitions or divestitures, and material adverse developments in global economic conditions or in the markets we serve. Additional information on these risks and uncertainties and other factors that could affect FICO's future results are described from time to time in FICO's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2020 and its subsequent filings with the SEC. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. FICO disclaims any intent or obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise.

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)













March 31,

September 30,

2021

2020

ASSETS:


Current assets:


     Cash and cash equivalents

$                197,836

$                     157,394

     Accounts receivable, net

264,804

334,180

     Prepaid expenses and other current assets

40,335

42,504

     Assets held for sale 

48,843

-

          Total current assets

551,818

534,078




Marketable securities and investments

31,777

26,573

Property and equipment, net

34,897

46,419

Operating lease right-of-use-assets

50,986

57,656

Goodwill and intangible assets, net

796,560

821,600

Other assets

113,570

119,914

$             1,579,608

$                  1,606,240




LIABILITIES AND STOCKHOLDERS' EQUITY:


Current liabilities:


     Accounts payable and other accrued liabilities

$                  79,829

$                       86,400

     Accrued compensation and employee benefits

71,347

117,952

     Deferred revenue

100,396

115,159

     Current maturities on debt

225,000

95,000

     Liabilities related to assets held for sale

23,989

-

          Total current liabilities

500,561

414,511




Long-term debt

740,226

739,435

Operating lease liabilities

59,100

73,207

Other liabilities

56,418

48,005

          Total liabilities

1,356,305

1,275,158




Stockholders' equity

223,303

331,082

$             1,579,608

$                  1,606,240

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME 

(In thousands, except per share data)

(Unaudited)

















Quarter Ended 

Six Months Ended

March 31,

March 31,

2021

2020

2021

2020

Revenues:






     Transactional and maintenance

$           280,919

$           240,702

$           533,069

$           461,076

     Professional services

37,794

47,905

79,219

91,930

     License

12,648

19,364

31,487

53,469

        Total revenues

331,361

307,971

643,775

606,475








Operating expenses:






     Cost of revenues

88,333

88,139

177,861

178,897

     Research & development

43,612

39,439

84,263

78,382

     Selling, general and administrative

97,272

103,465

191,183

215,486

     Amortization of intangible assets

945

1,202

1,882

2,998

     Restructuring and impairment charges

-

-

-

3,104

     Gain on sale of product line assets

-

-

(7,334)

-

        Total operating expenses

230,162

232,245

447,855

478,867

Operating income

101,199

75,726

195,920

127,608

Other expense, net

(9,375)

(13,262)

(16,136)

(23,249)

Income before income taxes

91,824

62,464

179,784

104,359

Income taxe provision (benefit)

23,150

4,176

24,618

(8,850)

Net income

$             68,674

$             58,288

$           155,166

$           113,209
























Basic earnings per share:

$                 2.36

$                 2.00

$                 5.33

$                 3.89

Diluted earnings per share:

$                 2.33

$                 1.94

$                 5.23

$                 3.76








Shares used in computing earnings per share:






     Basic

29,087

29,194

29,107

29,109

     Diluted

29,531

29,985

29,660

30,076

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)









Six Months Ended

 March 31, 

2021

2020

Cash flows from operating activities:


 Net income 

$               155,166

$               113,209

 Adjustments to reconcile net income to net cash provided by  


   operating activities: 


       Depreciation and amortization 

13,701

15,535

       Share-based compensation 

53,338

45,933

       Changes in operating assets and liabilities 

11,188

(66,649)

       Other, net 

(1,923)

13,831

          Net cash provided by operating activities 

231,470

121,859




 Cash flows from investing activities: 


 Purchases of property and equipment 

(4,220)

(13,166)

 Net activity from marketable securities 

(2,115)

(1,847)

 Other, net 

8,081

55

          Net cash provided by (used in) investing activities 

1,746

(14,958)




 Cash flows from financing activities: 


 Proceeds from revolving line of credit 

251,000

156,000

 Payments on revolving line of credit 

(121,000)

(377,000)

 Proceeds from issuance of senior notes 

-

350,000

 Proceeds from issuances of common stock 

10,390

23,216

 Taxes paid related to net share settlement of equity awards 

(86,653)

(97,000)

 Repurchases of common stock 

(250,356)

(148,008)

 Other, net 

(176)

(7,552)

          Net cash used in financing activities 

(196,795)

(100,344)




 Effect of exchange rate changes on cash 

4,021

(4,017)




 Increase in cash and cash equivalents 

40,442

2,540

 Cash and cash equivalents, beginning of period 

157,394

106,426

 Cash and cash equivalents, end of period 

$               197,836

$               108,966

 

FAIR ISAAC CORPORATION

REVENUE BY SEGMENT

(In thousands)

(Unaudited)






















Quarter Ended 

Six Months Ended


March 31,

March 31,


2021

2020

2021

2020










Applications revenues:








     Transactional and maintenance

$         96,687

$         97,789

$        194,418

$        196,626

     Professional services

27,627

35,134

58,232

69,157

     License

5,200

7,356

12,225

26,674

          Total applications revenues

$       129,514

$       140,279

$        264,875

$        292,457










Scores revenues:








     Transactional and maintenance

$       167,212

$       127,610

$        305,802

$        235,056

     Professional services

703

819

820

1,083

     License

804

719

6,748

8,147

          Total scores revenues

$       168,719

$       129,148

$        313,370

$        244,286










Decision Management Software revenues:








     Transactional and maintenance

$         17,020

$         15,303

$          32,849

$          29,394

     Professional services

9,464

11,952

20,167

21,690

     License

6,644

11,289

12,514

18,648

          Total decision management software revenues

$         33,128

$         38,544

$          65,530

$          69,732










Total revenues:








     Transactional and maintenance

$       280,919

$       240,702

$        533,069

$        461,076

     Professional services

37,794

47,905

79,219

91,930

     License

12,648

19,364

31,487

53,469

          Total revenues

$       331,361

$       307,971

$        643,775

$        606,475

 

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)

















Quarter Ended 

Six Months Ended

March 31,

March 31,

2021

2020

2021

2020








GAAP net income

$                    68,674

$                    58,288

$                  155,166

$                  113,209

Amortization of intangible assets

945

1,202

1,882

2,998

Restructuring and acquisition-related

-

-

-

3,104

Gain on sale of product line assets

-

-

(7,334)

-

Stock-based compensation expense

28,206

22,788

53,338

45,933

Income tax adjustments

(7,271)

(6,045)

(11,757)

(12,807)

Excess tax benefit

(329)

(11,925)

(19,512)

(33,943)

Non-GAAP net income

$                    90,225

$                    64,308

$                  171,783

$                  118,494
















GAAP diluted earnings per share

$                        2.33

$                        1.94

$                        5.23

$                        3.76

Amortization of intangible assets

0.03

0.04

0.06

0.10

Restructuring and acquisition-related

-

-

-

0.10

Gain on sale of product line assets

-

-

(0.25)

-

Stock-based compensation expense

0.96

0.76

1.80

1.53

Income tax adjustments

(0.25)

(0.20)

(0.40)

(0.43)

Excess tax benefit

(0.01)

(0.40)

(0.66)

(1.13)

Non-GAAP diluted earnings per share

$                        3.06

$                        2.14

$                        5.79

$                        3.94








Free cash flow






Net cash provided by operating activities

$                  153,523

$                    61,494

$                  231,470

$                  121,859

Capital expenditures

(1,175)

(6,667)

(4,220)

(13,167)

Free cash flow

$                  152,348

$                    54,827

$                  227,250

$                  108,692








Note: The numbers may not sum to total due to rounding.






















About Non-GAAP Financial Measures








To supplement the consolidated GAAP financial statements, the company uses the following non-GAAP financial measures: non-GAAP net income, non-GAAP EPS, and free cash flow. Non-GAAP net income and non-GAAP EPS exclude the impact of amortization expense, share-based compensation expense, restructuring and acquisition-related, excess tax benefit, and adjustment to tax valuation allowance items. Free cash flow excludes capital expenditures and dividends paid.  The presentation of these financial measures is not intended to be considered  in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. 








Management uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.  Our management believes these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of recurring business results including significant non-cash expenses.  We believe management and investors benefit from referring to these non-GAAP financial measures in assessing our performance when planning, forecasting and analyzing future periods.  These non-GAAP financial measures also facilitate management's internal comparisons to historical performance and liquidity as well as comparisons to our competitors' operating results.  We believe these non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key measures used by management in its financial and operating decision-making.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/fico-announces-earnings-of-2-33-per-share-for-second-quarter-fiscal-2021--301284840.html

SOURCE FICO

Investors/Analysts, Steve Weber, (800) 213-5542, investor@fico.com; Media, Greg Jawski, (212) 601-8248, greg.jawski@porternovelli.com