PR Newswire | Nov 10, 2021 04:15PM EST

11/10 15:15 CST

FICO Announces Earnings of $3.00 per Share for Fourth Quarter Fiscal 2021Revenue of $335 million vs. $374 million in prior year BOZEMAN, Mont., Nov. 10, 2021

BOZEMAN, Mont., Nov. 10, 2021 /PRNewswire/ -- FICO (NYSE: FICO), a leading applied analytics company, today announced results for its fourth fiscal quarter ended September 30, 2021.

Fourth Quarter Fiscal 2021 GAAP ResultsNet income for the quarter totaled $85.7 million, or $3.00 per share, versus $59.1 million, or $1.98 per share, in the prior year period.

Net cash provided by operating activities for the quarter was $91.8 million versus $136.2 million in the prior year period.

Fourth Quarter Fiscal 2021 Non-GAAP ResultsNon-GAAP Net Income for the quarter was $111.9 million versus $97.0 million in the prior year period. Non-GAAP EPS for the quarter was $3.92 versus $3.25 in the prior year period. Free cash flow was $90.0 million for the current quarter versus $135.3 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.

Fourth Quarter Fiscal 2021 GAAP RevenueThe company reported revenues of $334.6 million for the quarter as compared to $374.4 million reported in the prior year period.

"We had a strong finish to another great year," said Will Lansing, chief executive officer. "We are increasing our transparency around our software business, providing additional subscription metrics."

The company changed its reporting segments, merging its legacy Applications and Decision Management Software segments into a new Software segment, and retaining its Scores segment. Revenues for the fourth quarter of fiscal 2021 across the company's two operating segments were as follows:

* Software revenues, which include the company's analytics and digital decisioning technology, were $166.0 million in the fourth quarter, compared to $221.7 million in the prior year period, a decrease of 25%, primarily due to a reduction in up-front recognition of term license revenues for on-premises software sales, the sale of the Debt Collections and Recovery product line in early June, and a decline in professional services. Year-over-year, Software Annual Recurring Revenue (ARR) was up 7% year over year, consisting of 58% Platform ARR growth and 1% non-Platform growth. Software Dollar-Based Net Retention Rate was 106% year-over-year, with Platform Solutions at 143% and Non-Platform Solutions at 100%. * Scores revenues, which include the company's business-to-business (B2B) scoring solutions, and business-to-consumer (B2C) solutions, were $168.6 million in the fourth quarter, an increase of 10% compared to $152.7 million in the prior year period which included a one-time royalty true-up. B2B revenue increased 2%, driven largely by unit price increases and volumes, partially offset by the non-recurring prior year true-up. B2C revenue increased 32% from the prior year period due to higher volumes at myFICO.com, as well as through our partners.

OutlookThe company is providing the following guidance for fiscal 2022:

Fiscal 2022 Guidance

Revenues $1.35 billion

GAAP Net Income $318 million

GAAP EPS $11.29

Non GAAP Net Income $397 million

Non GAAP EPS $14.12

The Non-GAAP financial measures are described in the financial table captioned "Reconciliation of Non-GAAP Guidance."

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 fourth 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 Events page under Past Events through November 10, 2022.

About FICO

FICO (NYSE: FICO), a Delaware corporation, was founded in 1956 on the premise that data, used intelligently, can improve business decisions. Today, FICO's software and the widely used FICO(r) Score operationalize analytics, enabling thousands of businesses in nearly 120 countries to uncover new opportunities, make timely decisions that matter, and execute them at scale. Most leading banks and credit card issuers rely on our solutions, as do insurers, retailers, telecommunications providers, automotive companies, public agencies, and organizations in other industries. We also serve consumers through online services that enable people to access and understand their FICO Scores, the standard measure in the U.S. of consumer credit risk, empowering them to increase financial literacy and manage their financial health.

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 business strategy and reengineering efforts, 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, the effects of, and any changes in, laws and regulations applicable to the Company's business or its customers, the failure to protect data privacy and security, 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)

September 30, September 30,

2021 2020

ASSETS:

Current assets:

Cash and cash equivalents $ $ 195,354 157,394

Accounts receivable, net 312,107 334,180

Prepaid expenses and other current 43,513 42,504assets

Total current assets 550,974 534,078

Marketable securities and investments 33,196 26,573

Property and equipment, net 27,913 46,419

Operating lease right-of-use-assets 47,275 57,656

Goodwill and intangible assets, net 792,284 821,600

Other assets 116,134 119,914

$ $ 1,567,776 1,606,240

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:

Accounts payable and other accrued $ $ liabilities 100,284 86,400

Accrued compensation and employee 103,506 117,952benefits

Deferred revenue 105,417 115,159

Current maturities on debt 250,000 95,000

Total current liabilities 559,207 414,511

Long-term debt 1,009,018 739,435

Operating lease liabilities 53,670 73,207

Other liabilities 56,823 48,005

Total liabilities 1,678,718 1,275,158

Stockholders' equity (110,942) 331,082

$ $ 1,567,776 1,606,240

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Quarter Ended Year Ended

September 30, September 30,

2021 2020 2021 2020

Revenues:

On-premises and SaaS software $ 135,652 $ 174,627 $ 517,888 $ 584,576

Professional services 30,350 47,018 144,501 181,439

Scores 168,575 152,711 654,147 528,547

Total revenues 334,577 374,356 1,316,536 1,294,562

Operating expenses:

Cost of revenues 72,361 93,676 332,462 361,142

Research & development 41,142 46,706 171,231 166,499

Selling, general and administrative 97,369 105,612 396,281 420,930

Amortization of intangible assets 563 947 3,255 4,993

Restructuring and impairment charges 7,957 41,925 7,957 45,029

Gains on product line asset sales and business divestiture - - (100,139) -

Total operating expenses 219,392 288,866 811,047 998,593

Operating income 115,185 85,490 505,489 295,969

Other expense, net (9,719) (9,057) (32,347) (38,969)

Income before income taxes 105,466 76,433 473,142 257,000

Provision for income taxes 19,746 17,307 81,058 20,589

Net income $ 85,720 $ 59,126 $ 392,084 $ 236,411

Basic earnings per share: $ 3.06 $ 2.04 $ 13.65 $ 8.13

Diluted earnings per share: $ 3.00 $ 1.98 $ 13.40 $ 7.90

Shares used in computing earnings per share:

Basic 28,043 29,045 28,734 29,067

Diluted 28,531 29,833 29,260 29,932

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Year Ended

September 30,

2021 2020

Cash flows from operating activities:

Net income $ 392,084 $ 236,411

Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation and amortization 25,592 30,367

Share-based compensation 112,457 93,681

Changes in operating assets and liabilities (12,740) (41,308)

Gains on product line asset sales and business divestiture (100,139) -

Other, net 6,563 45,765

Net cash provided by operating activities 423,817 364,916

Cash flows from investing activities:

Purchases of property and equipment (7,569) (21,989)

Net activity from marketable securities (1,802) (2,649)

Proceeds from product line asset sales and business divestiture 147,431 -

Other, net (210) 55

Net cash provided by (used in) investing activities 137,850 (24,583)

Cash flows from financing activities:

Proceeds from revolving line of credit 682,000 263,000

Payments on revolving line of credit (259,000) (513,000)

Proceeds from issuance of senior notes - 350,000

Payment on senior notes - (85,000)

Proceeds from issuance of treasury stock under employee stock plans 20,881 42,258

Taxes paid related to net share settlement of equity awards (91,609) (102,903)

Repurchases of common stock (874,179) (235,223)

Other, net (1,664) (8,556)

Net cash used in financing activities (523,571) (289,424)

Effect of exchange rate changes on cash (136) 59

Increase in cash and cash equivalents 37,960 50,968

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

Cash and cash equivalents, end of year $ 195,354 $ 157,394

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)

Quarter Ended Year Ended

September 30, September 30,

2021 2020 2021 2020

GAAP net income $ 85,720 $ 59,126 $ 392,084 $ 236,411

Amortization of intangible assets 563 947 3,255 4,993

Restructuring and impairment charges 7,957 41,925 7,957 45,029

Gains on product line asset sales and business divestiture - - (100,139) -

Stock-based compensation expense 28,358 25,483 112,457 93,681

Income tax adjustments (8,724) (19,325) (9,090) (37,871)

Excess tax benefit (1,925) (11,192) (23,998) (50,037)

Non-GAAP net income $ 111,949 $ 96,964 $ 382,526 $ 292,206

GAAP diluted earnings per share $ 3.00 $ 1.98 $ 13.40 $ 7.90

Amortization of intangible assets 0.02 0.03 0.11 0.17

Restructuring and impairment charges 0.28 1.41 0.27 1.50

Gains on product line asset sales and business divestiture - - (3.42) -

Stock-based compensation expense 0.99 0.85 3.84 3.13

Income tax adjustments (0.31) (0.65) (0.31) (1.27)

Excess tax benefit (0.07) (0.38) (0.82) (1.67)

Non-GAAP diluted earnings per share $ 3.92 $ 3.25 $ 13.07 $ 9.76

Free cash flow

Net cash provided by operating activities $ 91,754 $ 136,185 $ 423,816 $ 364,915

Capital expenditures (1,777) (916) (7,569) (21,990)

Free cash flow $ 89,977 $ 135,269 $ 416,247 $ 342,925

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.

FAIR ISAAC CORPORATION

RECONCILIATION OF NON-GAAP GUIDANCE

(In millions, except per share data)

(Unaudited)

Fiscal 2022 Guidance

GAAP net income $ 318

Amortization of intangible assets 2

Stock-based compensation expense 115

Income tax adjustments (30)

Excess tax benefit (8)

Non-GAAP net income $ 397

GAAP diluted earnings per share $ 11.29

Amortization of intangible assets 0.07

Stock-based compensation expense 4.09

Income tax adjustments (1.06)

Excess tax benefit (0.28)

Non-GAAP diluted earnings per share $ 14.12

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