Fair Isaac Lifts Guidance as Scores Revenue Surges 60%
The credit-scoring company posted $691.7 million in quarterly revenue, a 39% jump that prompted management to raise its full-year outlook for the second consecutive time.
Fair Isaac Corp. (FICO) reported fiscal second-quarter revenue of $691.7 million, a 39% increase from a year earlier, as its Scores business accelerated sharply on higher mortgage-origination pricing and volume. The result marked a decisive rebound from the prior two quarters, when revenue had hovered near $512 million to $516 million.
The Scores segment drove the quarter, posting $475.0 million in revenue, up 60% year over year. Within that, business-to-business scores revenue grew 72%, more than doubling the 36% pace recorded in the fiscal first quarter, as Fair Isaac benefited from both higher unit prices and increased mortgage origination activity. The acceleration built on a steady climb from 25% B2B growth in the fiscal fourth quarter of 2025.
Software revenue, the company's other segment, also turned a corner. Sales rose 7% year over year to $216.7 million, up from 2% growth in the prior quarter and flat results in the fiscal fourth quarter. Annual recurring revenue for the software business grew 10% as of March 31, accelerating from 5% at the end of December and 4% at the end of September. Platform ARR, a faster-growing subset, expanded 49% year over year, while non-platform ARR continued to contract, declining 8% — consistent with the prior quarter's rate. Software dollar-based net retention improved to 109%, with platform NRR climbing to 136% from 122% three months earlier.
Profitability expanded alongside the top line. GAAP earnings per share reached $11.14, up 69% from $6.59 a year ago, while non-GAAP EPS rose 60% to $12.50. Free cash flow surged to $214.3 million, a 227% year-over-year increase, rebounding from an 11% decline in the fiscal first quarter.
Fair Isaac raised its full-year fiscal 2026 guidance for the second straight quarter, lifting its revenue outlook by $100 million to $2.45 billion and increasing GAAP EPS guidance to $35.60 from $33.47. Non-GAAP EPS guidance moved to $40.45 from $38.17. The company had similarly raised its fiscal 2025 outlook during the third quarter of that year.
The company also moved aggressively on capital returns. Fair Isaac authorized a new $2.0 billion stock repurchase program, replacing the remaining capacity under a prior $1.5 billion authorization. On June 5, it drew $1.5 billion under an incremental term loan and used the proceeds to enter an accelerated share repurchase agreement with Wells Fargo, expecting initial delivery of roughly 1.06 million shares. Total buybacks in the quarter reached $776.6 million, adding to $1.41 billion repurchased in the fiscal fourth quarter and $866.5 million in the fiscal third quarter.