PR Newswire | Jan 28, 2021 04:16PM EST

01/28 15:15 CST

FICO Announces Earnings of $2.90 per Share for First Quarter Fiscal 2021Revenue of $312 million vs. $299 million in prior year SAN JOSE, Calif., Jan. 28, 2021

SAN JOSE, Calif., Jan. 28, 2021 /PRNewswire/ -- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its first fiscal quarter ended December 31, 2020.

First Quarter Fiscal 2021 GAAP ResultsNet income for the quarter totaled $86.5 million, or $2.90 per share, versus $54.9 million, or $1.82 per share, in the prior year period.

Net cash provided by operating activities for the quarter was $77.9 million versus $60.4 million in the prior year period.

First Quarter Fiscal 2021 Non-GAAP ResultsNon-GAAP Net Income for the quarter was $81.6 million versus $54.2 million in the prior year period. Non-GAAP EPS for the quarter was $2.74 versus $1.80 in the prior year period. Free cash flow for the quarter was $74.9 million versus $53.9 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.

First Quarter Fiscal 2021 GAAP RevenueThe company reported revenues of $312.4 million for the quarter as compared to $298.5 million reported in the prior year period.

"We are off to a good start in the new year," said Will Lansing, chief executive officer. "We are delivering strong earnings growth as we continue the strategic transition to our SaaS platform."

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

* Applications revenues, which include the company's preconfigured decision management applications and associated professional services, were $135.4 million in the first quarter, compared to $152.2 million in the prior year period, a decrease of 11%, due primarily to decreased license revenues in our Falcon Fraud products. * Scores revenues, which include the company's business-to-business (B2B) scoring solutions and associated professional services, and business-to-consumer (B2C) service, were $144.7 million in the first quarter, compared to $115.1 million in the prior year period, an increase of 26%. B2B revenue increased 20%, driven largely by higher mortgage origination volumes and unit price increases. B2C revenue increased 40% 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(r), Xpress Optimization, Decision Management Platform and related professional services, were $32.4 million in the first quarter compared to $31.2 million in the prior year period, an increase of 4%, due primarily to an increases in SaaS subscription revenue, partially offset by a decline in up-front license revenues.

Company to Host Conference CallThe company will host a webcast today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to report its first 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 January 28, 2022.

About FICOFICO (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 InformationExcept 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)

December 31, September 30,

2020 2020

ASSETS:

Current assets:

Cash and cash equivalents $ 144,662 $ 157,394

Accounts receivable, net 310,626 334,180

Prepaid expenses and other current assets 53,153 42,504

Total current assets 508,441 534,078

Marketable securities and investments 29,782 26,573

Property and equipment, net 39,011 46,419

Operating lease right-of-use-assets 56,030 57,656

Goodwill and intangible assets, net 826,144 821,600

Other assets 117,455 119,914

$ 1,576,863 $ 1,606,240

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:

Accounts payable and other accrued liabilities $ 71,003 $ 86,400

Accrued compensation and employee benefits 73,231 117,952

Deferred revenue 115,808 115,159

Current maturities on debt 131,000 95,000

Total current liabilities 391,042 414,511

Long-term debt 739,831 739,435

Operating lease liabilities 69,815 73,207

Other liabilities 52,054 48,005

Total liabilities 1,252,742 1,275,158

Stockholders' equity 324,121 331,082

$ 1,576,863 $ 1,606,240

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Quarter Ended

December 31,

2020 2019

Revenues:

Transactional and maintenance $ 252,150 $ 220,374

Professional services 41,425 44,025

License 18,839 34,105

Total revenues 312,414 298,504

Operating expenses:

Cost of revenues 89,528 90,758

Research & development 40,651 38,943

Selling, general and administrative 93,911 112,021

Amortization of intangible assets 937 1,796

Restructuring and impairment charges - 3,104

Gain on sale of product line assets (7,334) -

Total operating expenses 217,693 246,622

Operating income 94,721 51,882

Other expense, net (6,761) (9,987)

Income before income taxes 87,960 41,895

Income taxe provision (benefit) 1,468 (13,026)

Net income $ 86,492 $ 54,921

Basic earnings per share: $ 2.97 $ 1.89

Diluted earnings per share: $ 2.90 $ 1.82

Shares used in computing earnings per share:

Basic 29,127 29,025

Diluted 29,789 30,169

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Quarter Ended

December 31,

2020 2019

Cash flows from operating activities:

Net income $ 86,492 $ 54,921

Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation and amortization 7,026 7,856

Share-based compensation 25,132 23,145

Changes in operating assets and liabilities (35,584) (28,419)

Other, net (5,119) 2,862

Net cash provided by operating activities 77,947 60,365

Cash flows from investing activities:

Purchases of property and equipment (3,045) (6,500)

Net activity from marketable securities (1,174) (2,566)

Proceeds from sale of product line assets 8,291 -

Other, net (210) 55

Net cash provided by (used in) investing activities 3,862 (9,011)

Cash flows from financing activities:

Proceeds from revolving line of credit 116,000 117,000

Payments on revolving line of credit (80,000) (367,000)

Proceeds from issuance of senior notes - 350,000

Proceeds from issuances of common stock 57 5,091

Taxes paid related to net share settlement of equity awards (85,678) (86,047)

Repurchases of common stock (50,011) (60,009)

Other, net (176) (7,230)

Net cash used in financing activities (99,808) (48,195)

Effect of exchange rate changes on cash 5,267 1,631

Increase (decrease) in cash and cash equivalents (12,732) 4,790

Cash and cash equivalents, beginning of period 157,394 106,426

Cash and cash equivalents, end of period $ 144,662 $ 111,216

FAIR ISAAC CORPORATION

REVENUE BY SEGMENT

(In thousands)

(Unaudited)

Quarter Ended

December 31,

2020 2019

Applications revenues:

Transactional and maintenance $ 97,731 $ 98,837

Professional services 30,605 34,023

License 7,025 19,318

Total Applications revenues $ 135,361 $ 152,178

Scores revenues:

Transactional and maintenance $ 138,590 $ 107,446

Professional services 117 264

License 5,944 7,428

Total Scores revenues $ 144,651 $ 115,138

Decision Management Software revenues:

Transactional and maintenance $ 15,829 $ 14,091

Professional services 10,703 9,738

License 5,870 7,359

Total Decision Management Software revenues $ 32,402 $ 31,188

Total revenues:

Transactional and maintenance $ 252,150 $ 220,374

Professional services 41,425 44,025

License 18,839 34,105

Total revenues $ 312,414 $ 298,504

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)

Quarter Ended

December 31,

2020 2019

GAAP net income $ 86,492 $ 54,921

Amortization of intangible assets 937 1,796

Restructuring and impairment charges - 3,104

Gain on sale of product line assets (7,334) -

Stock-based compensation expense 25,132 23,145

Income tax adjustments (4,486) (6,762)

Excess tax benefit (19,183) (22,018)

Non-GAAP net income $ 81,558 $ 54,186

GAAP diluted earnings per share $ 2.90 $ 1.82

Amortization of intangible assets 0.03 0.06

Restructuring and impairment charges - 0.10

Gain on sale of product line assets (0.25) -

Stock-based compensation expense 0.84 0.77

Income tax adjustments (0.15) (0.22)

Excess tax benefit (0.64) (0.73)

Non-GAAP diluted earnings per share $ 2.74 $ 1.80

Free cash flow

Net cash provided by operating activities $ 77,947 $ 60,365

Capital expenditures (3,045) (6,500)

Free cash flow $ 74,902 $ 53,865

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.

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SOURCE FICO