FICO Announces Earnings of $1.80 per Share for Fourth Quarter Fiscal 2019
SAN JOSE, Calif., Nov. 4, 2019 /PRNewswire/ -- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its fourth fiscal quarter ended September 30, 2019.
Fourth Quarter Fiscal 2019 GAAP Results
Net income for the quarter totaled $54.6 million, or $1.80 per share, versus $32.7 million, or $1.07 per share, in the prior year period.
Net cash provided by operating activities for the quarter was $95.4 million versus $60.0 million in the prior year period.
Fourth Quarter Fiscal 2019 Non-GAAP Results
Non-GAAP Net Income for the quarter was $60.8 million versus $41.1 million in the prior year period. Non-GAAP EPS for the quarter was $2.01 versus $1.34 in the prior year period. Free cash flow for the quarter was $89.6 million versus $52.9 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 2019 GAAP Revenue
The company reported revenues of $305.3 million for the quarter as compared to $256.5 million reported in the prior year period.
"Our strong fourth quarter capped off another great year," said Will Lansing, chief executive officer. "We delivered double-digit revenue and earnings growth while expanding our margins."
Revenues for the fourth quarter of fiscal 2019 across each of the company's three operating segments were as follows:
-- Applications revenues, which include the company's preconfigured
decision management applications and associated professional services,
were $149.9 million in the fourth quarter, compared to $139.0 million in
the prior year period, an increase of 8%, due primarily to increased
transactional volumes and license sales in Falcon Fraud Solutions.
-- Scores revenues, which include the company's business-to-business (B2B)
scoring solutions and associated professional services, and
business-to-consumer (B2C) service, were $115.9 million in the fourth
quarter, compared to $89.5 million in the prior year period, an increase
of 30%. B2B revenue increased 40% and B2C revenue increased 7% from the
prior year period.
-- Decision Management Software revenues, which include Blaze Advisor(®),
Xpress Optimization, Decision Management Platform and related
professional services, were $39.5 million in the fourth quarter compared
to $28.0 million in the prior year period, an increase of 41%, due
primarily to increased license sales and services revenue.
Outlook
The company is providing the following guidance for fiscal 2020:
Fiscal 2020 Guidance
Revenues
$1.245 billion
---
GAAP Net Income
$204 million
---
GAAP EPS $6.75
---
Non GAAP Net Income
$251 million
---
Non GAAP EPS $8.30
---
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 2019 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 4, 2020.
About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 165 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.
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 success of the Company's Decision Management strategy and reengineering initiative, 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, 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, material adverse developments in global economic conditions or in the markets we serve, and other risks described from time to time in FICO's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2018 and subsequent quarterly reports on Form 10-Q. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, September 30,
2019 2018
* As Adjusted
ASSETS:
Current assets:
Cash and cash equivalents $106,426 $90,023
Accounts receivable, net 297,427 266,742
Prepaid expenses and other
current assets 51,853 39,624
Total current assets 455,706 396,389
Marketable securities and
investments 21,865 19,756
Property and equipment, net 53,027 48,837
Goodwill and intangible
assets, net 817,681 815,426
Other assets 85,169 50,059
$1,433,448 $1,330,467
===
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other
accrued liabilities $55,572 $51,276
Accrued compensation and
employee benefits 106,240 84,292
Deferred revenue 111,016 103,335
Current maturities on debt 218,000 235,000
Total current liabilities 490,828 473,903
Long-term debt 606,790 528,944
Other liabilities 46,063 40,183
Total liabilities 1,143,681 1,043,030
Stockholders' equity 289,767 287,437
$1,433,448 $1,330,467
===
* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from
Contracts with Customers (Topic 606), which we adopted on October 1, 2018.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Quarter Ended Year Ended
September 30, September 30,
2019 2018 2019 2018
* As Adjusted * As Adjusted
Revenues:
Transactional and
maintenance $228,936 $195,266 $860,948 $750,603
Professional
services 48,138 44,215 184,095 176,910
License 28,270 17,051 115,040 72,633
---
Total revenues 305,344 256,532 1,160,083 1,000,146
---
Operating expenses:
Cost of revenues 87,996 79,962 336,845 312,898
Research &
development 39,396 34,407 149,478 128,383
Selling, general
and administrative 105,992 93,054 414,086 376,912
Amortization of
intangible assets 1,673 1,551 6,126 6,594
Total operating
expenses 235,057 208,974 906,535 824,787
---
Operating income 70,287 47,558 253,548 175,359
Other expense, net (9,399) 1,432 (37,476) (18,427)
Income before
income taxes 60,888 48,990 216,072 156,932
Provision for
income taxes 6,304 16,277 23,948 30,450
---
Net income $54,584 $32,713 $192,124 $126,482
Basic earnings per
share: $1.89 $1.13 $6.63 $4.26
Diluted earnings
per share: $1.80 $1.07 $6.34 $4.06
Shares used in computing earnings per share:
Basic 28,918 29,077 28,980 29,711
===
Diluted 30,290 30,702 30,294 31,180
===
* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended
September 30,
2019 2018
* As Adjusted
Cash flows from operating activities:
Net income $192,124 $126,482
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 31,612 30,182
Share-based compensation 82,973 74,814
Changes in operating assets and liabilities (55,466) (8,415)
Other, net 9,107 (11)
Net cash provided by operating activities 260,350 223,052
---
Cash flows from investing activities:
Purchases of property and equipment (23,981) (31,299)
Net activity from marketable securities (2,924) (2,820)
Cash paid for acquisitions, net of cash acquired (15,855)
Other, net 20,000
Net cash used in investing activities (42,760) (14,119)
---
Cash flows from financing activities:
Proceeds from revolving line of credit 229,000 427,000
Payments on revolving line of credit (141,000) (531,000)
Proceeds from issuance of senior notes 400,000
Payment on senior notes (28,000) (131,000)
Proceeds from issuances of common stock 22,788 11,023
Taxes paid related to net share settlement of equity awards (52,996) (44,205)
Repurchases of common stock (228,894) (342,596)
Other, net (945) (7,849)
Net cash used in financing activities (200,047) (218,627)
---
Effect of exchange rate changes on cash (1,140) (5,901)
---
Increase (decrease) in cash and cash equivalents 16,403 (15,595)
Cash and cash equivalents, beginning of year 90,023 105,618
Cash and cash equivalents, end of year $106,426 $90,023
* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.
FAIR ISAAC CORPORATION
REVENUE BY SEGMENT
(In thousands)
(Unaudited)
Quarter Ended Year Ended
September 30, September 30,
2019 2018 2019 2018
* As Adjusted * As Adjusted
Applications revenues:
Transactional and
maintenance $100,774 $94,540 $395,398 $372,283
Professional services 35,826 34,448 137,258 142,736
License 13,323 10,059 72,378 49,356
Total applications
revenues $149,923 $139,047 $605,034 $564,375
Scores revenues:
Transactional and
maintenance $115,155 $88,339 $415,288 $331,662
Professional services 163 287 2,157 1,900
License 627 881 3,732 2,308
Total scores revenues $115,945 $89,507 $421,177 $335,870
Decision Management
Software revenues:
Transactional and
maintenance $13,007 $12,387 $50,262 $46,658
Professional services 12,149 9,480 44,680 32,274
License 14,320 6,111 38,930 20,969
Total decision management
software revenues $39,476 $27,978 $133,872 $99,901
Total revenues:
Transactional and
maintenance $228,936 $195,266 $860,948 $750,603
Professional services 48,138 44,215 184,095 176,910
License 28,270 17,051 115,040 72,633
Total revenues $305,344 $256,532 $1,160,083 $1,000,146
* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.
FAIR ISAAC CORPORATION
NON-GAAP RESULTS
(In thousands, except per share data)
(Unaudited)
Quarter Ended
Year Ended
September 30,
September 30,
---
2019 2018 2019 2018
* As Adjusted
* As Adjusted
GAAP net income $54,584 $32,713 $192,124 $126,482
Amortization of
intangible assets 1,673 1,551 6,126 6,594
Stock-based
compensation expense 21,042 20,183 82,973 74,813
Realized gain on
cost-method
investment (10,000) (10,000)
Income tax
adjustments (5,836) (3,654) (22,939) (18,948)
Excess tax benefit (10,643) (7,556) (30,666) (22,253)
Tax Cuts and Jobs Act 7,848 14,754
Non-GAAP net income $60,820 $41,085 $227,618 $171,442
GAAP diluted earnings
per share $1.80 $1.07 $6.34 $4.06
Amortization of
intangible assets 0.06 0.05 0.20 0.21
Stock-based
compensation expense 0.69 0.66 2.74 2.40
Realized gain on
cost-method
investment (0.33) (0.32)
Income tax
adjustments (0.19) (0.12) (0.76) (0.61)
Excess tax benefit (0.35) (0.25) (1.01) (0.71)
Tax Cuts and Jobs Act 0.26 0.47
Non-GAAP diluted
earnings per share $2.01 $1.34 $7.51 $5.50
Free cash flow
Net cash provided by
operating activities $95,414 $59,963 $260,350 $223,052
Capital expenditures (5,811) (7,079) (23,981) (31,299)
Free cash flow $89,603 $52,884 $236,369 $191,753
Note: The numbers may not sum to total due to rounding.
* Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on October 1, 2018.
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 2020 Guidance
GAAP net income $204
Amortization of
intangible assets 5
Restructuring and
acquisition-related 4
Stock-based
compensation expense 90
Income tax
adjustments (26)
Excess tax benefit (25)
Non-GAAP net income $251
GAAP diluted earnings
per share $6.75
Amortization of
intangible assets 0.15
Restructuring and
acquisition-related 0.12
Stock-based
compensation expense 2.96
Income tax
adjustments (0.85)
Excess tax benefit (0.83)
Non-GAAP diluted
earnings per share $8.30
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
