FICO Announces Earnings of $3.00 per Share for Fourth Quarter Fiscal 2021

Rhea-AI Summary

FICO reported strong fourth quarter results for fiscal 2021, with a net income of $85.7 million ($3.00 per share) compared to $59.1 million ($1.98 per share) in the prior year. However, total revenues decreased to $334.6 million from $374.4 million a year ago.

Non-GAAP net income rose to $111.9 million ($3.92 per share) from $97.0 million ($3.25 per share). The company anticipates fiscal 2022 revenues of $1.35 billion and GAAP net income of $318 million.

Positive

• Net income increased to $85.7 million from $59.1 million year-over-year.
• Non-GAAP EPS rose to $3.92, up from $3.25 in the same quarter last year.
• Software Annual Recurring Revenue (ARR) grew by 7% year-over-year.
• Scores revenues increased by 10%, contributing positively to the overall performance.

Negative

• Total revenues decreased to $334.6 million, down from $374.4 million year-over-year.
• Software revenues saw a significant drop of 25% compared to the prior year.

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 Results
Net 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 Results
Non-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 Revenue
The 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.

Outlook 
The 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 Call
The 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® 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 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 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 assets	43,513		42,504
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 benefits	103,506		117,952
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

FAQ

What were FICO's fourth quarter earnings results for fiscal 2021?

FICO reported a net income of $85.7 million ($3.00 per share) for the fourth quarter of fiscal 2021.

How much did FICO's total revenue decrease in the fourth quarter of fiscal 2021?

FICO's total revenue decreased to $334.6 million from $374.4 million in the prior year.

What is FICO's guidance for fiscal 2022?

FICO projects revenues of $1.35 billion and GAAP net income of $318 million for fiscal 2022.

How did FICO's non-GAAP EPS perform in the fourth quarter of fiscal 2021?

FICO's non-GAAP EPS increased to $3.92 from $3.25 year-over-year.

What factors contributed to the decline in FICO's software revenues?

The decline in software revenues was attributed to reduced upfront recognition of term license revenues, the sale of a product line, and a drop in professional services.