Strong Top-Line and Earnings Growth
Q2 revenue of $692 million, up 39% year-over-year; GAAP net income $264 million, up 63% YoY; GAAP EPS $11.14, up 69% YoY; non-GAAP net income $297 million, up 54% YoY; non-GAAP EPS $12.50, up 60% YoY.
Fair Isaac
· FICO
April 28th, 2026
Summary
- Earnings Call Date:
- 2026-04-28
- Change Since:
- +12.85%
- Next Earnings Date:
- 2026-08-05
Earnings Call Sentiment
PositiveThe call highlighted multiple clear strengths: robust revenue and earnings growth, raised full-year guidance, strong platform momentum (high ARR growth and very high platform NRR), exceptional free cash flow and record share repurchases, plus strategic product and pricing moves to accelerate adoption of FICO Score 10T. Offsetting items include declines in legacy/non-platform ARR and revenues, regulatory/competitive uncertainty tied to FHFA and VantageScore developments, modestly rising operating and interest expenses, and geographic revenue concentration. On balance, the positive operational and financial beats, platform traction, and upgraded guidance materially outweigh the challenges noted, though management maintains conservative volume assumptions and is monitoring regulatory timing.
Company Guidance
FICO raised full‑year fiscal 2026 guidance to $2.45 billion in revenue (up 23% year‑over‑year), GAAP net income of $825 million with GAAP EPS of $35.60 (up 27% and 34%, respectively) and non‑GAAP net income of $946 million with non‑GAAP EPS of $40.45 (up 29% and 35%), while reiterating conservative score‑volume assumptions and no anticipated share loss to competition; Q2 results that underpin the raise included $692 million revenue (+39% YoY), GAAP net income of $264 million (+63%) and GAAP EPS $11.14 (+69%), non‑GAAP net income $297 million (+54%) and non‑GAAP EPS $12.50 (+60%), Q2 free cash flow $214 million (trailing‑4‑quarter FCF $867 million, +28%), Q2 non‑GAAP operating margin 65% (up 712 bps YoY), total software ARR $789 million (+10% YoY) with platform ARR $349 million (44% of ARR, platform ARR growth +49%), Q2 platform ACV bookings $28 million (TTM $126 million, +36%), and continued capital returns including $605 million of buybacks in Q2 (484,000 shares at $1,251 avg) plus an additional $170 million (164,000 shares at $1,040 avg) since April 1; management expects modestly higher operating expense dollars into H2, an operating tax rate of 25–26% (effective ~24%), $272 million in cash, $3.64 billion total debt (5.5% weighted average rate) and modestly higher interest expense into the back half.
Raised Full-Year Guidance
Fiscal 2026 revenue guidance raised to $2.45 billion (up 23% vs prior year); GAAP net income guidance $825 million (GAAP EPS $35.60, increases of ~27% and ~34% noted); non-GAAP net income guidance $946 million (non-GAAP EPS $40.45, increases of ~29% and ~35% noted).
Scores Segment Outperformance Driven by Mortgage
Scores revenue $475 million, up 60% YoY; B2B scores up 72% YoY; mortgage originations revenue up 127% YoY and comprised 72% of B2B revenue and 63% of total Scores revenue for the quarter.
Platform Momentum in Software Business
Total software revenue $217 million, up 7% YoY; Platform ARR $349 million, up 49% YoY and representing 44% of total software ARR ($789 million, +10% YoY); platform ARR growth includes migrations but excluding those migrations platform ARR grew in the mid-30% range; platform NRR 136% (company dollar-based NRR 109%).
Sales and Bookings Strength
Q2 software ACV bookings $28 million; trailing 12-month ACV bookings $126 million, up 36% YoY; SaaS revenues grew 19% YoY driven by FICO Platform.
Excellent Cash Generation and Share Repurchases
Q2 free cash flow $214 million; trailing four-quarter free cash flow $867 million, up 28% vs prior four-quarter period; repurchased $605 million of stock (484,000 shares, largest quarterly repurchase in dollar terms in company history) and an additional $170 million repurchased since April 1.
Operating Leverage and Margin Expansion
Non-GAAP operating margin expanded to 65% in the quarter from 58% a year ago, a year-over-year improvement of ~712 basis points.
Product & IP Strength / Strategic Positioning
Priced FICO Score 10T for broader adoption ($0.99 per score + $65 funding fee) and added 11 lenders to the early adopter program (55 lenders total, representing >$495 billion annual serviceable originations and >$1.6 trillion in eligible servicing); 137 AI-related patents and continued rollout of FICO Platform and UltraFICO/Cash Flow initiatives.
Operator
Good day, and thank you for standing by. Welcome to the Second Quarter 2026 FICO Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dave Singleton. Please go ahead, sir.
Dave Singleton
Good afternoon, and thank you for attending FICO's second quarter earnings call. I'm Dave Singleton, Vice President of Investor Relations, and I'm joined today by our CEO, Will Lansing; our CFO, Steve Weber. Today, we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison with the prior quarter to facilitate understanding of the run rate of the business. Certain statements made in this presentation are forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many risks and uncertainties that could cause actual results to differ materially. Information concerning these risks and uncertainties is contained in the company's filings with the SEC, particularly in the risk factors and forward-looking statements portions of such filings. Copies are available from the SEC, from the FICO website or from our Investor Relations team.
This call will also include statements regarding certain non-GAAP financial measures. Please refer to the company's earnings release and Regulation G schedule issued today for a reconciliation of these non-GAAP financial measures to the most comparable GAAP measure. The earnings release and Regulation G schedule are available o...
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