PR Newswire | Jan 27, 2022 04:16PM EST

01/27 15:15 CST

FICO Announces Earnings of $3.09 per Share for First Quarter Fiscal 2022Revenue of $322 million vs. $312 million in prior year BOZEMAN, Mont., Jan. 27, 2022

BOZEMAN, Mont., Jan. 27, 2022 /PRNewswire/ -- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its first fiscal quarter ended December 31, 2021.

First Quarter Fiscal 2022 GAAP Results

Net income for the quarter totaled $85.0 million, or $3.09 per share, versus $86.5 million, or $2.90 per share, in the prior year period.

Net cash provided by operating activities for the quarter was $124.9 million versus $77.9 million in the prior year period.

First Quarter Fiscal 2022 Non-GAAP Results

Non-GAAP Net Income for the quarter was $101.9 million versus $81.6 million in the prior year period. Non-GAAP EPS for the quarter was $3.70 versus $2.74 in the prior year period. Free cash flow was $124.0 million for the current quarter versus $74.9 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 2022 GAAP Revenue

The company reported revenues of $322.4 million for the quarter as compared to $312.4 million reported in the prior year period.

"We're off to a good start in fiscal 2022, delivering 10% Annual Recurring Revenue (ARR) growth in our Software segment," said Will Lansing, chief executive officer. "Our Scores segment continues to perform very well, delivering strong growth in both our B2B and B2C markets."

Revenues for the first quarter of fiscal 2022 across the company's two operating segments were as follows:

* Software revenues, which include the company's analytics and digital decisioning technology, were $152.9 million in the first quarter, compared to $167.8 million in the prior year period, a decrease of 9%, primarily due to the sale of the Debt Collections and Recovery product line in June 2021 and reductions in professional services, partially offset by growth in platform software revenue. Year-over-year, Software Annual Recurring Revenue was up 10%, consisting of 67% platform ARR growth and 3% non-platform ARR growth. Software Dollar-Based Net Retention Rate was 109% year-over-year, with platform solutions at 143% and non-platform solutions at 102%. * Scores revenues, which include the company's business-to-business (B2B) scoring solutions, and business-to-consumer (B2C) scoring solutions, were $169.5 million in the first quarter, compared to $144.7 million in the prior year period, an increase of 17%. B2B revenue increased 13%, driven largely by unit price increases. B2C revenue increased 27% from the prior year period due to higher volumes at myFICO.com, as well as through our partners.

Outlook

The company is reiterating its previously provided 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 Call

The 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 2022 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 27, 2023.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, 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 business 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, 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, 2021 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,

2021 2021

ASSETS:

Current assets:

Cash and cash equivalents $ 162,157 $ 195,354

Accounts receivable, net 260,161 312,107

Prepaid expenses and other current assets 39,678 43,513

Total current assets 461,996 550,974

Marketable securities and investments 35,242 33,196

Property and equipment, net 24,597 27,913

Operating lease right-of-use-assets 46,061 47,275

Goodwill and intangible assets, net 790,817 792,284

Other assets 104,597 116,134

$ 1,463,310 $ 1,567,776

LIABILITIES AND STOCKHOLDERS' DEFICIT:

Current liabilities:

Accounts payable and other accrued liabilities $ 95,490 $ 100,284

Accrued compensation and employee benefits 62,926 103,506

Deferred revenue 98,381 105,417

Current maturities on debt 65,000 250,000

Total current liabilities 321,797 559,207

Long-term debt 1,568,292 1,009,018

Operating lease liabilities 50,972 53,670

Other liabilities 60,548 56,823

Total liabilities 2,001,609 1,678,718

Stockholders' deficit (538,299) (110,942)

$ 1,463,310 $ 1,567,776

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Quarter Ended

December 31,

2021 2020

Revenues:

On-premises and SaaS software $ 126,338 $ 126,455

Professional services 26,536 41,308

Scores 169,487 144,651

Total revenues 322,361 312,414

Operating expenses:

Cost of revenues 69,203 89,528

Research & development 38,980 40,651

Selling, general and administrative 98,048 93,911

Amortization of intangible assets 544 937

Gains on product line asset sales and business divestiture - (7,334)

Total operating expenses 206,775 217,693

Operating income 115,586 94,721

Other expense, net (10,766) (6,761)

Income before income taxes 104,820 87,960

Provision for income taxes 19,861 1,468

Net income $ 84,959 $ 86,492

Basic earnings per share: $ 3.13 $ 2.97

Diluted earnings per share: $ 3.09 $ 2.90

Shares used in computing earnings per share:

Basic 27,167 29,127

Diluted 27,524 29,789

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Quarter Ended

December 31,

2021 2020

Cash flows from operating activities:

Net income $ 84,959 $ 86,492

Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation and amortization 5,227 7,026

Share-based compensation 29,878 25,132

Changes in operating assets and liabilities (4,171) (35,584)

Other, net 8,988 (5,119)

Net cash provided by operating activities 124,881 77,947

Cash flows from investing activities:

Purchases of property and equipment (895) (3,045)

Net activity from marketable securities (2,634) (1,174)

Proceeds from product line asset sales and business divestiture 2,257 8,291

Other, net - (210)

Net cash provided by (used in) investing activities (1,272) 3,862

Cash flows from financing activities:

Proceeds from revolving line of credit and term loan 620,000 116,000

Payments on revolving line of credit and term loan (788,000) (80,000)

Proceeds from issuance of senior notes 550,000 -

Proceeds from issuance of treasury stock under employee stock plans 550 57

Taxes paid related to net share settlement of equity awards (47,024) (85,678)

Repurchases of common stock (482,755) (50,011)

Other, net (8,200) (176)

Net cash used in financing activities (155,429) (99,808)

Effect of exchange rate changes on cash (1,377) 5,267

Decrease in cash and cash equivalents (33,197) (12,732)

Cash and cash equivalents, beginning of period 195,354 157,394

Cash and cash equivalents, end of period $ 162,157 $ 144,662

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)

Quarter Ended

December 31,

2021 2020

GAAP net income $ 84,959 $ 86,492

Amortization of intangible assets 544 937

Gains on product line asset sales and business divestiture - (7,334)

Stock-based compensation expense 29,878 25,132

Income tax adjustments (7,493) (4,486)

Excess tax benefit (5,957) (19,183)

Non-GAAP net income $ 101,931 $ 81,558

GAAP diluted earnings per share $ 3.09 $ 2.90

Amortization of intangible assets 0.02 0.03

Gains on product line asset sales and business divestiture - (0.25)

Stock-based compensation expense 1.09 0.84

Income tax adjustments (0.27) (0.15)

Excess tax benefit (0.22) (0.64)

Non-GAAP diluted earnings per share $ 3.70 $ 2.74

Free cash flow

Net cash provided by operating activities $ 124,881 $ 77,947

Capital expenditures (895) (3,045)

Free cash flow $ 123,986 $ 74,902

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 thefollowing 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 ofamortization expense, share-based compensation expense, restructuring andacquisition-related,

excess tax benefit, and adjustment to tax valuation allowance items. Free cashflow excludes capital expenditures and dividends paid. The presentation ofthese financial measures

is not intended to be considered in isolation or as a substitute for, orsuperior to, the financial information prepared and presented in accordancewith GAAP.

Management uses these non-GAAP financial measures for financial and operationaldecision-making and as a means to evaluate period-to-period comparisons. Our

management believes these non-GAAP financial measures provide meaningfulsupplemental information regarding our performance and liquidity by excludingcertain items

that may not be indicative of recurring business results including significantnon-cash expenses. We believe management and investors benefit from referringto these

non-GAAP financial measures in assessing our performance when planning,forecasting and analyzing future periods. These non-GAAP financial measuresalso facilitate

management's internal comparisons to historical performance and liquidity aswell as comparisons to our competitors' operating results. We believe thesenon-GAAP financial

measures are useful to investors because they allow for greater transparencywith respect to key measures used by management in its financial and operatingdecision-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 thefollowing 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 ofamortization expense, share-based compensation expense, restructuring andacquisition-related,

excess tax benefit, and adjustment to tax valuation allowance items. Free cashflow excludes capital expenditures and dividends paid. The presentation ofthese financial measures

is not intended to be considered in isolation or as a substitute for, orsuperior to, the financial information prepared and presented in accordancewith GAAP.

Management uses these non-GAAP financial measures for financial and operationaldecision-making and as a means to evaluate period-to-period comparisons. Our

management believes these non-GAAP financial measures provide meaningfulsupplemental information regarding our performance and liquidity by excludingcertain items

that may not be indicative of recurring business results including significantnon-cash expenses. We believe management and investors benefit from referringto these

non-GAAP financial measures in assessing our performance when planning,forecasting and analyzing future periods. These non-GAAP financial measuresalso facilitate

management's internal comparisons to historical performance and liquidity aswell as comparisons to our competitors' operating results. We believe thesenon-GAAP financial

measures are useful to investors because they allow for greater transparencywith respect to key measures used by management in its financial and operatingdecision-making.

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SOURCE FICO