Hello everyone, FICO has also presented figures. I continue to see a moat here, which is why I remain invested.
The use of direct licenses is increasing.
CEO William Lansing highlighted the strong start to the year, reiterated guidance for fiscal 2026 and reported first quarter revenue of $512 million, up 16% year-over-year. He stated: "We delivered first quarter GAAP net income of $158 million, up 4%, and GAAP earnings per share of $6.61, up 8% year-over-year." Non-GAAP net income was $176 million and non-GAAP earnings per share were $7.33. Free cash flow amounted to USD 165 million in the first quarter and USD 718 million in the last four quarters.
Lansing highlighted the "Scores" segment as a growth driver, with sales increasing by 29% to 305 million US dollars. This increase is primarily attributable to B2B scores and the continued positive development in the B2C sector. The "Software" segment achieved sales of 2 % (USD 207 million), with the platform business growing by 37 % and non-platform sales falling by 13 %.
Lansing announced the addition of four new strategic resellers to the FICO Mortgage Direct Licensing Program and a DLP agreement with MeridianLink. He also noted the expansion of the FICO Score 10T Adopter Program, stating that lenders in this program generate "over $377 billion in annual loan volume and over $1.6 trillion in eligible servicing volume."
A strategic partnership with Plaid was highlighted to introduce the next generation UltraFICO score, which incorporates real-time cash flow data. The launch of this enhanced score is expected in the first half of 2026.
Gartner recognized FICO as a Leader in the Magic Quadrant for Decision Intelligence Platforms in January 2026. Lansing commented: "We are best positioned because of our ability to execute."
CFO Steven Weber reported: "B2B revenue increased 36%, primarily due to higher unit pricing for mortgage valuation and increased mortgage origination volume." He highlighted record software bookings of $38 million and a 33% growth in the platform's annual recurring revenue (ARR) to $303 million. ARR outside the platform fell by 8% to USD 463 million.
Outlook
Lansing confirmed the forecast for the 2026 financial year and expressed confidence that the company would exceed the forecast for the financial year. Management indicated that potential updates to the guidance would be revisited during the second quarter conference call due to macroeconomic uncertainty. Weber explained: "We continue to expect a net effective tax rate of 24% and an operating tax rate of 25% for the full year."
The company anticipates a slight increase in operating costs over the course of the financial year and emphasized its continued focus on platform-driven ARR growth.
Financial results
Sales in the first quarter amounted to USD 512 million, with GAAP net income of USD 158 million. Non-GAAP net income totaled $176 million. Free cash flow for the quarter amounted to USD 165 million.
Scores segment revenue was USD 305 million, with B2B revenue up 36% and B2C revenue up 5%. Mortgage origination revenue grew by 60% and accounted for 51% of B2B revenue.
Bookings in the software area (ACV) reached a quarterly record of 38 million US dollars. The annual recurring revenue (ARR) in the software area amounted to USD 766 million, while the ARR of the platform was USD 303 million, an increase of 33 % compared to the previous year.
Operating costs amounted to USD 278 million and the operating margin (non-GAAP) was 54%. Cash and cash equivalents and marketable assets totaled USD 218 million; total debt amounted to USD 3.2 billion.
The company repurchased 95,000 shares for USD 163 million in the first quarter.
Conclusion
FICO delivered strong revenue and profit growth in the first quarter of 2026, driven by continued momentum in Scores and accelerated growth in Platform ARR. The company's strategic initiatives - expanding the direct licensing program, launching new partnerships and driving innovation in both scores and software - position FICO for further growth. Management remains confident of exceeding full-year guidance, but is taking a cautious approach to updates due to macroeconomic uncertainty, while operational execution and adoption of key programs are progressing as planned.
