Fair Isaac's Q2 2025: Unraveling Contradictions in Software Growth and Mortgage Volume Trends

Software ARR growth expectations, impact of macroeconomic factors on platform usage, software revenue growth sustainability, mortgage volume trends are the key contradictions discussed in Fair Isaac's latest 2025Q2 earnings call.



Revenue and Earnings Growth:
- Fair Isaac Corporation reported revenues of $499 million in Q2 2025, up 15% over the prior year. Earnings included GAAP net income of $163 million, up 25%, and non-GAAP net income of $193 million, up 25%.
- The growth in revenue and earnings was driven by strong performance in the Scores segment, particularly in mortgage originations and increased adoption of FICO Score 10 T.

Scores Segment Performance:
- The Scores segment generated revenues of $297 million, up 25% year-over-year, with B2B revenues increasing 31% and B2C revenues up 6%.
- Mortgage originations revenues accounted for 54% of B2B revenue and 44% of total Scores revenue, contributing significantly to the growth.

Platform Software Business Trends:
- FICO's software segment revenues were $202 million, up 2% from the prior year, with ACV bookings reaching $21.8 million.
- Growth in license revenue and strategic partnerships, such as with Fujitsu and dacadoo, supported this segment's performance despite a decline in professional services.

Macroeconomic Impact and Financial Outlook:
- FICO reiterated its fiscal '25 guidance amidst uncertainties, reflecting a conservative approach to financial expectations.
- The company reported free cash flow of $65 million in Q2, reflecting a 6% increase from the prior year, and $677 million over the last four quarters, up 45%.