Fair Isaac 2025 Q3 Earnings Beats Expectations as Net Income Rises 44%

Fair Isaac (FICO) reported its fiscal 2025 Q3 earnings on July 30th, 2025. The company surpassed analyst expectations with a GAAP earnings per share (EPS) of $7.40, exceeding the forecasted $6.52. Revenue for the quarter reached $536 million, which was above the anticipated $515.26 million. In addition, Fair Isaac raised its full-year guidance, reflecting a positive outlook despite potential challenges. This strategic adjustment highlights the company's confidence in continued growth and strong market positioning.

Revenue

Fair Isaac's total revenue for Q3 2025 saw a significant increase of 19.8%, reaching $536.41 million compared to $447.85 million in the same quarter of the previous year. The Scores segment contributed $324.31 million, driven by higher unit prices and increased mortgage originations, while the Software segment added $212.11 million, mainly through growth in Software as a Service revenues. Unallocated corporate expenses were reported as zero, affirming a streamlined financial approach.

Earnings/Net Income

Fair Isaac's EPS rose by 46.3% to $7.49 in Q3 2025 from $5.12 in Q3 2024, showcasing continued earnings growth. The company's profitability was further strengthened by a net income of $181.79 million, marking a 44.0% increase from $126.26 million in the previous year. These results underscore the company's sustained operational resilience and strong earnings trajectory.

Price Action

The stock price of Fair Isaac edged up 1.32% during the latest trading day, declined 0.23% over the most recent full trading week, and plummeted 15.88% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Fair Isaac shares after a revenue increase on the financial report release date and holding for 30 days has demonstrated favorable performance over the past three years. The backtest results revealed a 20.56% return, significantly outperforming the S&P 500's 13.28% return during the same period. This strategy capitalizes on the positive momentum that often follows FICO's revenue raises, indicative of the company's strong performance and growth prospects. The consistent positive returns across different quarters, except for a slight dip in Year 3's first quarter, underscore the robustness of this approach in diverse market conditions. By allowing for a 30-day holding period, investors can reasonably capture the post-earnings rally that historically follows FICO's revenue announcements.

CEO Commentary

"In our third fiscal quarter, we again delivered strong results with revenue growth of 20%, and even stronger earnings growth," said Will Lansing, Chief Executive Officer. The significant revenue increase was driven by a 34% rise in Scores revenues, attributed to higher unit prices and increased mortgage originations. Additionally, B2B revenue surged by 42%, reflecting successful multi-year license renewals. The CEO expressed satisfaction with the performance and announced a revision of the company's full-year guidance, indicating a positive outlook despite potential challenges.

Guidance

The company is updating its fiscal 2025 guidance, maintaining revenue expectations at $1.98 billion. However, it revised GAAP net income to $630 million from $624 million, and GAAP EPS is now projected at $25.60, up from $25.05. Non-GAAP net income is also adjusted to $718 million from $712 million, with an increase in Non-GAAP EPS to $29.15 from $28.58.

Additional News

Recent developments at Fair Isaac Corporation (FICO) include strategic collaborations and market shifts. The company has announced a significant partnership with Amazon Web Services to enhance AI-driven automated decision workflows using the FICO Platform, aiming to improve operational efficiency and client adoption. Additionally, FICO introduced the FICO Score 10 BNPL and FICO Score 10 T BNPL, integrating Buy Now, Pay Later data to enhance credit score predictive power and financial inclusion. However, FICO faces market challenges, notably from the Federal Housing Finance Agency's approval of VantageScore 4.0 for mortgages, which could reshape revenue streams and market valuation. These strategic moves demonstrate FICO's commitment to innovation and adaptability in a competitive landscape.