FICO Announces Earnings of $1.82 per Share for First Quarter Fiscal 2020
SAN JOSE, Calif., Jan. 30, 2020 /PRNewswire/ -- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its first fiscal quarter ended December 31, 2019.
First Quarter Fiscal 2020 GAAP Results
Net income for the quarter totaled $54.9 million, or $1.82 per share, versus $40.0 million, or $1.32 per share, in the prior year period.
Net cash provided by operating activities for the quarter was $60.4 million versus $48.9 million in the prior year period.
First Quarter Fiscal 2020 Non-GAAP Results
Non-GAAP Net Income for the quarter was $54.2 million versus $43.9 million in the prior year period. Non-GAAP EPS for the quarter was $1.80 versus $1.45 in the prior year period. Free cash flow for the quarter was $53.9 million versus $42.4 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.
First Quarter Fiscal 2020 GAAP Revenue
The company reported revenues of $298.5 million for the quarter as compared to $262.3 million reported in the prior year period.
"We had a great start to our fiscal 2020," said Will Lansing, chief executive officer. "We achieved double-digit revenue growth, and are delivering significant innovation throughout the organization."
Revenues for the first quarter of fiscal 2020 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 $152.2 million in the first quarter, compared to $147.7 million in
the prior year period, an increase of 3%, due primarily to increased
services and SaaS subscription revenues in Originations 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 $115.1 million in the first
quarter, compared to $85.7 million in the prior year period, an increase
of 34%. B2B revenue increased 46% and B2C revenue increased 11% from the
prior year period.
-- Decision Management Software revenues, which include Blaze Advisor(®),
Xpress Optimization, Decision Management Platform and related
professional services, were $31.2 million in the first quarter compared
to $28.9 million in the prior year period, an increase of 8%, due
primarily to increased SaaS subscription and services revenues.
Outlook
The company is reiterating its previously provided 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 first quarter fiscal 2020 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 January 30, 2021.
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, 2019 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)
December 31, September 30,
2019 2019
ASSETS:
Current assets:
Cash and cash equivalents $111,216 $106,426
Accounts receivable, net 281,640 297,427
Prepaid expenses and other
current assets 68,138 51,853
Total current assets 460,994 455,706
Marketable securities and
investments 25,388 21,865
Property and equipment, net 56,156 53,027
Operating lease right-of-use
assets 88,475 -
Goodwill and intangible
assets, net 825,334 817,681
Other assets 88,691 85,169
$1,545,038 $1,433,448
===
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other
accrued liabilities $75,585 $55,572
Accrued compensation and
employee benefits 71,780 106,240
Deferred revenue 114,667 111,016
Current maturities on debt 180,000 218,000
Total current liabilities 442,032 490,828
Long-term debt 738,259 606,790
Operating lease liabilities 80,424 -
Other liabilities 43,362 46,063
Total liabilities 1,304,077 1,143,681
Stockholders' equity 240,961 289,767
$1,545,038 $1,433,448
===
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Quarter Ended
December 31,
2019 2018
---
Revenues:
Transactional
and
maintenance $220,374 $194,193
Professional
services 44,025 40,808
License 34,105 27,255
---
Total
revenues 298,504 262,256
---
Operating expenses:
Cost of
revenues 90,758 76,066
Research &
development 38,943 35,426
Selling,
general and
administrative 112,021 100,258
Amortization
of
intangible
assets 1,796 1,502
Restructuring
and
acquisition-
related 3,104
Total
operating
expenses 246,622 213,252
---
Operating
income 51,882 49,004
Other
expense, net (9,987) (11,848)
Income before
income taxes 41,895 37,156
Income tax
benefit (13,026) (2,851)
---
Net income $54,921 $40,007
Basic
earnings per
share: $1.89 $1.38
Diluted
earnings per
share: $1.82 $1.32
Shares used in computing earnings per
share:
Basic 29,025 28,961
===
Diluted 30,169 30,336
===
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Quarter Ended
December 31,
2019 2018
---
Cash flows from operating
activities:
Net
income $54,921 $40,007
Adjustments to reconcile net
income to net cash provided
by
operating activities:
Depreciation
and
amortization 7,856 7,967
Share-
based
compensation 23,145 21,854
Changes
in
operating
assets
and
liabilities (28,419) (24,129)
Other,
net 2,862 3,158
Net
cash
provided
by
operating
activities 60,365 48,857
---
Cash flows from investing
activities:
Purchases
of
property
and
equipment (6,500) (6,474)
Net
activity
from
marketable
securities (2,566) (2,201)
Other,
net 55
Net
cash
used
in
investing
activities (9,011) (8,675)
---
Cash flows from financing
activities:
Proceeds
from
revolving
line
of
credit 117,000 103,000
Payments
on
revolving
line
of
credit (367,000) (35,000)
Proceeds
from
issuance
of
senior
notes 350,000
Proceeds
from
issuances
of
common
stock 5,091 7,550
Taxes
paid
related
to
net
share
settlement
of
equity
awards (86,047) (42,987)
Repurchases
of
common
stock (60,009) (82,700)
Other,
net (7,230)
Net
cash
used
in
financing
activities (48,195) (50,137)
---
Effect
of
exchange
rate
changes
on
cash 1,631 (172)
---
Increase
(decrease)
in
cash
and
cash
equivalents 4,790 (10,127)
Cash
and
cash
equivalents,
beginning
of
period 106,426 90,023
Cash
and
cash
equivalents,
end
of
period $111,216 $79,896
FAIR ISAAC CORPORATION
REVENUE BY SEGMENT
(In thousands)
(Unaudited)
Quarter Ended
December 31,
2019 2018
Applications
revenues:
Transactional and
maintenance $98,837 $97,165
Professional
services 34,023 31,462
License 19,318 19,032
Total Applications
revenues $152,178 $147,659
Scores revenues:
Transactional and
maintenance $107,446 $84,821
Professional
services 264 701
License 7,428 161
Total Scores
revenues $115,138 $85,683
Decision Management
Software revenues:
Transactional and
maintenance $14,091 $12,207
Professional
services 9,738 8,645
License 7,359 8,062
Total Decision
Management
Software revenues $31,188 $28,914
Total revenues:
Transactional and
maintenance $220,374 $194,193
Professional
services 44,025 40,808
License 34,105 27,255
Total revenues $298,504 $262,256
FAIR ISAAC CORPORATION
NON-GAAP RESULTS
(In thousands, except per share data)
(Unaudited)
Quarter Ended
December 31,
2019 2018
---
GAAP net
income $54,921 $40,007
Amortization
of
intangible
assets 1,796 1,502
Restructuring
and
acquisition-
related 3,104
Stock-
based
compensation
expense 23,145 21,854
Income tax
adjustments (6,762) (6,219)
Excess tax
benefit (22,018) (13,233)
Non-GAAP
net income $54,186 $43,911
---
GAAP
diluted
earnings
per share $1.82 $1.32
Amortization
of
intangible
assets 0.06 0.05
Restructuring
and
acquisition-
related 0.10
Stock-
based
compensation
expense 0.77 0.72
Income tax
adjustments (0.22) (0.21)
Excess tax
benefit (0.73) (0.44)
Non-GAAP
diluted
earnings
per share $1.80 $1.45
Free cash flow
Net cash
provided
by
operating
activities $60,365 $48,857
Capital
expenditures (6,500) (6,474)
---
Free cash
flow $53,865 $42,383
---
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
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
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
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
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SOURCE FICO
