FICO Announces New Stock Repurchase Program on July 30, 2024

Rhea-AI Summary

FICO (NYSE:FICO), a leading predictive analytics and decision management software company, has announced a new $1 billion stock repurchase program on July 30, 2024. This program, approved by FICO's Board of Directors, follows the completion of the company's previous stock repurchase program that ran from January 2024 to July 2024. The new program is open-ended, allowing FICO to repurchase its shares from time to time in both the open market and through negotiated transactions. This move demonstrates FICO's confidence in its financial position and commitment to enhancing shareholder value.

Positive

• Board approval for a substantial $1 billion stock repurchase program
• Open-ended nature of the program provides flexibility in timing and execution
• Potential to enhance shareholder value by reducing the number of outstanding shares
• Indicates management's confidence in the company's financial position and future prospects

Negative

• Large cash outlay for stock repurchases may reduce funds available for other investments or growth opportunities
• Potential impact on the company's cash reserves and financial flexibility

Insights

Financial Analyst

FICO's announcement of a new $1 billion stock repurchase program is a significant move that warrants attention from investors. This decision signals the company's confidence in its financial position and future prospects. Here are key points to consider:

• The size of the program ($1 billion) is substantial, indicating FICO's strong cash position and willingness to return value to shareholders.
• An open-ended repurchase program provides flexibility, allowing FICO to buy back shares strategically based on market conditions and company performance.
• Stock buybacks can potentially increase earnings per share (EPS) by reducing the number of outstanding shares, which could positively impact stock price.
• However, investors should note that funds allocated to buybacks are not being used for other purposes such as research and development, acquisitions, or dividend payments.

It's worth noting that this program follows the completion of a previous repurchase initiative, suggesting a consistent approach to capital allocation. While buybacks can be seen as a positive signal, they don't necessarily guarantee long-term stock performance. Investors should consider this move in the context of FICO's overall financial health, growth strategy and market position in the predictive analytics and decision management software sector.

Market Research Analyst

FICO's decision to initiate a new stock repurchase program reflects broader trends in the tech sector and carries implications for market dynamics:

• In the current market environment, many tech companies are opting for buybacks as a means of returning value to shareholders, especially when they perceive their stock as undervalued.
• This move could be interpreted as FICO's management believing that the company's shares are undervalued relative to its future potential.
• The timing of this announcement, coming shortly after the completion of a previous buyback program, suggests a strategic approach to maintaining a consistent presence in the market.
• Investors should monitor how this program affects FICO's stock liquidity and trading volumes, as large buybacks can sometimes impact these factors.

From a competitive standpoint, FICO's ability to allocate $1 billion to share repurchases may be seen as a show of financial strength relative to its peers in the analytics and decision management software space. However, it's important to compare this move with industry trends and competitor actions to fully gauge its significance in the market landscape.

BOZEMAN, Mont.--(BUSINESS WIRE)-- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced that its Board of Directors has approved a stock repurchase program to acquire up to $1 billion of the company’s outstanding common stock. This new program was approved following completion of FICO’s previous stock repurchase program, which was in effect from January 2024 until adoption of the new program in July 2024. The new stock repurchase program, which is open-ended, allows the company to repurchase its shares from time to time in the open market and in negotiated transactions.

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 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO^® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency.

Learn more at https://www.fico.com.

Join the conversation at https://x.com/FICO_corp & https://www.fico.com/en/blogs/.

For FICO news and media resources, visit https://www.fico.com/en/newsroom.

FICO is a registered trademark of Fair Isaac Corporation in the U.S. 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 success of the Company’s Software segment’s business strategy, the Company’s ability to continue to develop new and enhanced products and services, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, disruptions and uncertainties with respect to global economic conditions as well as in industries and markets of the Company and its customers, the Company’s ability to keep up with rapidly changing technologies, its ability to recruit and retain qualified 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 the occurrence of certain other world events such as geopolitical tensions, military conflicts, the level and volatility of interest rates, the level of inflation, the continuing effects of the COVID-19 pandemic, an actual recession or fears of a recession, trade policies and tariffs, and political and governmental instability. 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, 2023 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730536193/en/

Investors/Analysts:

Dave Singleton

(800) 459-7125

investor@fico.com

Media:

Katie O’Connell

(510) 621-9832

press@fico.com

Source: FICO

FAQ

What is the size of FICO's new stock repurchase program announced on July 30, 2024?

FICO announced a new stock repurchase program to acquire up to $1 billion of the company's outstanding common stock.

When did FICO's previous stock repurchase program end?

FICO's previous stock repurchase program was in effect from January 2024 until July 2024, when the new program was adopted.

Is there a time limit on FICO's new stock repurchase program?

No, the new stock repurchase program is open-ended, allowing FICO to repurchase shares from time to time without a specific end date.

How will FICO execute its new stock repurchase program?

FICO can repurchase its shares through both open market transactions and negotiated transactions.