FICO Announces Earnings of $1.94 per Share for Second Quarter Fiscal 2020
SAN JOSE, Calif., April 29, 2020 /PRNewswire/ -- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its second fiscal quarter ended March 31, 2020.
Second Quarter Fiscal 2020 GAAP Results
Net income for the quarter totaled $58.3 million, or $1.94 per share, versus $33.4 million, or $1.10 per share, in the prior year period.
Net cash provided by operating activities for the quarter was $61.5 million versus $47.8 million in the prior year period.
Second Quarter Fiscal 2020 Non-GAAP Results
Non-GAAP Net Income for the quarter was $64.3 million versus $47.3 million in the prior year period. Non-GAAP EPS for the quarter was $2.14 versus $1.56 in the prior year period. Free cash flow for the quarter was $54.8 million versus $43.6 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.
Second Quarter Fiscal 2020 GAAP Revenue
The company reported revenues of $308.0 million for the quarter as compared to $278.2 million reported in the prior year period.
"As the world struggles with the pandemic and its economic impact, we are dedicated to standing by our customers to support their decisioning during this critical time," said Will Lansing, chief executive officer. "While we face near-term uncertainty, I'm pleased that our second quarter results were strong and that we are well positioned to manage the challenges in front of us."
Revenues for the second 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 $140.3 million in the second quarter, compared to $141.8 million in the prior year period, a decrease of 1%, due primarily to decreased license and services revenues in Collections and Recovery 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 $129.2 million in the second quarter, compared to $104.4 million in the prior year period, an increase of 24%. B2B revenue increased 27% and B2C revenue increased 15% from the prior year period. -- Decision Management Software revenues, which include Blaze Advisor(®), Xpress Optimization, Decision Management Platform and related professional services, were $38.5 million in the second quarter compared to $32.0 million in the prior year period, an increase of 20%, due primarily to increased license and SaaS subscription revenues.
Outlook
Due to the lack of visibility related to the COVID-19 pandemic and recovery, the Company has withdrawn financial guidance at this time.
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 second 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 Past Events page through April 29, 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 impact of COVID-19 on macroeconomic conditions and the Company's business, operations and personnel, 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) March 31, September 30, 2020 2019 ASSETS: Current assets: Cash and cash equivalents $108,966 $106,426 Accounts receivable, net 307,307 297,427 Prepaid expenses and other current assets 67,398 51,853 Total current assets 483,671 455,706 Marketable securities and investments 21,138 21,865 Property and equipment, net 59,491 53,027 Operating lease right-of- use-assets 87,142 - Goodwill and intangible assets, net 815,827 817,681 Other assets 84,863 85,169 $1,552,132 $1,433,448 === LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and other accrued liabilities $87,911 $55,572 Accrued compensation and employee benefits 68,507 106,240 Deferred revenue 114,406 111,016 Current maturities on debt 209,000 218,000 Total current liabilities 479,824 490,828 Long-term debt 738,632 606,790 Operating lease liabilities 77,485 - Other liabilities 42,040 46,063 Total liabilities 1,337,981 1,143,681 Stockholders' equity 214,151 289,767 $1,552,132 $1,433,448 ===
FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Quarter Ended Six Months Ended March 31, March 31, --- 2020 2019 2020 2019 --- Revenues: Transactional and maintenance $240,702 $211,779 $461,076 $405,972 Professional services 47,905 50,555 91,930 91,363 License 19,364 15,900 53,469 43,155 --- Total revenues 307,971 278,234 606,475 540,490 --- Operating expenses: Cost of revenues 88,139 85,568 178,897 161,634 Research & development 39,439 37,684 78,382 73,110 Selling, general and administrative 103,465 104,930 215,486 205,188 Amortization of intangible assets 1,202 1,503 2,998 3,005 Restructuring and acquisition- related 3,104 - Total operating expenses 232,245 229,685 478,867 442,937 --- Operating income 75,726 48,549 127,608 97,553 Other expense, net (13,262) (8,575) (23,249) (20,423) Income before income taxes 62,464 39,974 104,359 77,130 Income tax provision (benefit) 4,176 6,593 (8,850) 3,742 --- Net income $58,288 $33,381 $113,209 $73,388 Basic earnings per share: $2.00 $1.15 $3.89 $2.53 Diluted earnings per share: $1.94 $1.10 $3.76 $2.42 Shares used in computing earnings per share: Basic 29,194 29,074 29,109 29,017 === Diluted 29,985 30,259 30,076 30,297 ===
FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended March 31, 2020 2019 --- Cash flows from operating activities: Net income $113,209 $73,388 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,535 15,786 Share-based compensation 45,933 42,336 Changes in operating assets and liabilities (66,649) (36,624) Other, net 13,831 1,760 Net cash provided by operating activities 121,859 96,646 --- Cash flows from investing activities: Purchases of property and equipment (13,166) (10,644) Net activity from marketable securities (1,847) (2,129) Other, net 55 Net cash used in investing activities (14,958) (12,773) --- Cash flows from financing activities: Proceeds from revolving line of credit 156,000 138,000 Payments on revolving line of credit (377,000) (80,000) Proceeds from issuance of senior notes 350,000 Proceeds from issuances of common stock 23,216 12,850 Taxes paid related to net share settlement of equity awards (97,000) (48,470) Repurchases of common stock (148,008) (119,723) Other, net (7,552) Net cash used in financing activities (100,344) (97,343) --- Effect of exchange rate changes on cash (4,017) 332 --- Increase (decrease) in cash and cash equivalents 2,540 (13,138) Cash and cash equivalents, beginning of period 106,426 90,023 Cash and cash equivalents, end of period $108,966 $76,885
REVENUE BY SEGMENT (In thousands) (Unaudited) Quarter Ended Six Months Ended March 31, March 31, 2020 2019 2020 2019 Applications revenues: Transactional and maintenance $97,789 $97,074 $196,626 $194,239 Professional services 35,134 35,981 69,157 67,443 License 7,356 8,760 26,674 27,792 Total applications revenues $140,279 $141,815 $292,457 $289,474 Scores revenues: Transactional and maintenance $127,610 $102,363 $235,056 $187,184 Professional services 819 901 1,083 1,602 License 719 1,139 8,147 1,300 Total scores revenues $129,148 $104,403 $244,286 $190,086 Decision Management Software revenues: Transactional and maintenance $15,303 $12,342 $29,394 $24,549 Professional services 11,952 13,673 21,690 22,318 License 11,289 6,001 18,648 14,063 Total decision management software revenues $38,544 $32,016 $69,732 $60,930 Total revenues: Transactional and maintenance $240,702 $211,779 $461,076 $405,972 Professional services 47,905 50,555 91,930 91,363 License 19,364 15,900 53,469 43,155 Total revenues $307,971 $278,234 $606,475 $540,490
FAIR ISAAC CORPORATION NON-GAAP RESULTS (In thousands, except per share data) (Unaudited) Quarter Ended Six Months Ended March 31, March 31, --- 2020 2019 2020 2019 --- GAAP net income $58,288 $33,381 $113,209 $73,388 Amortization of intangible assets 1,202 1,503 2,998 3,005 Restructuring and acquisition- related 3,104 - Stock-based compensation expense 22,788 20,482 45,933 42,336 Income tax adjustments (6,045) (5,594) (12,807) (11,813) Excess tax benefit (11,925) (2,501) (33,943) (15,734) Non-GAAP net income $64,308 $47,271 $118,494 $91,182 --- GAAP diluted earnings per share $1.94 $1.10 $3.76 $2.42 Amortization of intangible assets 0.04 0.05 0.10 0.10 Restructuring and acquisition- related 0.10 - Stock-based compensation expense 0.76 0.68 1.53 1.40 Income tax adjustments (0.20) (0.18) (0.43) (0.39) Excess tax benefit (0.40) (0.08) (1.13) (0.52) Non-GAAP diluted earnings per share $2.14 $1.56 $3.94 $3.01 Free cash flow Net cash provided by operating activities $61,494 $47,789 $121,859 $96,646 Capital expenditures (6,667) (4,170) (13,167) (10,644) Free cash flow $54,827 $43,619 $108,692 $86,002 ---
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