FICO Announces Earnings of $2.15 per Share for Third Quarter Fiscal 2020
SAN JOSE, Calif., July 29, 2020 /PRNewswire/ -- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its third fiscal quarter ended June 30, 2020.
Third Quarter Fiscal 2020 GAAP Results
Net income for the quarter totaled $64.1 million, or $2.15 per share, versus $64.2 million, or $2.12 per share, in the prior year period.
Net cash provided by operating activities for the quarter was $106.9 million versus $68.3 million in the prior year period.
Third Quarter Fiscal 2020 Non-GAAP Results
Non-GAAP Net Income for the quarter was $76.7 million versus $75.6 million in the prior year period. Non-GAAP EPS for the quarter was $2.58 versus $2.50 in the prior year period. Free cash flow for the quarter was $99.0 million versus $60.8 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.
Third Quarter Fiscal 2020 GAAP Revenue
The company reported revenues of $313.7 million for the quarter as compared to $314.2 million reported in the prior year period.
"I am pleased to report we posted a very solid quarter, which again shows the resiliency of our business even in these uncertain times," said Will Lansing, chief executive officer. "We continued to perform well in all parts of our business, and delivered record cash flow."
Revenues for the third 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 $141.5 million in the third quarter, compared to $165.6 million in
the prior year period, a decrease of 15%, due primarily to decreased
license sales in our Falcon Fraud product.
-- Scores revenues, which include the company's business-to-business (B2B)
scoring solutions and associated professional services, and
business-to-consumer (B2C) service, were $131.6 million in the third
quarter, compared to $115.1 million in the prior year period, an
increase of 14%. B2B revenue increased 12% and B2C revenue increased 21%
from the prior year period.
-- Decision Management Software revenues, which include Blaze Advisor(®),
Xpress Optimization, Decision Management Platform and related
professional services, were $40.7 million in the third quarter, compared
to $33.5 million in the prior year period, an increase of 22%, due
primarily to SaaS subscription revenues.
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 third 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 July 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)
June 30,
September 30,
2020 2019
ASSETS:
Current assets:
Cash and cash equivalents $125,673 $106,426
Accounts receivable, net 303,558 297,427
Prepaid expenses and other
current assets 53,780 51,853
Total current assets 483,011 455,706
Marketable securities and
investments 25,136 21,865
Property and equipment, net 60,336 53,027
Operating lease right-of-
use-assets 84,106 -
Goodwill and intangible
assets, net 814,647 817,681
Other assets 96,884 85,169
$1,564,120 $1,433,448
===
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other
accrued liabilities $70,680 $55,572
Accrued compensation and
employee benefits 95,674 106,240
Deferred revenue 105,833 111,016
Current maturities on debt 188,000 218,000
Total current liabilities 460,187 490,828
Long-term debt 739,039 606,790
Operating lease liabilities 74,000 -
Other liabilities 43,608 46,063
Total liabilities 1,316,834 1,143,681
Stockholders' equity 247,286 289,767
$1,564,120 $1,433,448
===
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Quarter Ended Nine Months Ended
June 30,
June 30,
---
2020 2019 2020 2019
---
Revenues:
Transactional and
maintenance $246,829 $226,040 $707,905 $632,012
Professional
services 43,633 44,594 135,563 135,957
License 23,269 43,615 76,738 86,770
---
Total revenues 313,731 314,249 920,206 854,739
---
Operating expenses:
Cost of revenues 88,569 87,215 267,466 248,849
Research &
development 41,411 36,972 119,793 110,082
Selling, general
and administrative 99,832 102,906 315,318 308,094
Amortization of
intangible assets 1,048 1,448 4,046 4,453
Restructuring and
acquisition-
related 3,104 -
Total operating
expenses 230,860 228,541 709,727 671,478
---
Operating income 82,871 85,708 210,479 183,261
Other expense, net (6,663) (7,654) (29,912) (28,077)
Income before
income taxes 76,208 78,054 180,567 155,184
Provision for
income taxes 12,132 13,902 3,282 17,644
---
Net income $64,076 $64,152 $177,285 $137,540
Basic earnings per
share: $2.21 $2.21 $6.10 $4.74
Diluted earnings
per share: $2.15 $2.12 $5.92 $4.54
Shares used in computing earnings per share:
Basic 29,005 28,967 29,075 29,000
===
Diluted 29,744 30,292 29,966 30,295
===
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
June 30,
2020 2019
---
Cash flows from operating activities:
Net income $177,285 $137,540
Adjustments to reconcile net income to net cash
provided by
operating activities:
Depreciation and
amortization 23,549 23,734
Share-based
compensation 68,197 61,931
Changes in operating
assets and
liabilities (55,873) (59,682)
Other, net 15,572 1,413
Net cash provided by
operating activities 228,730 164,936
---
Cash flows from investing activities:
Purchases of property
and equipment (21,073) (18,170)
Net activity from
marketable
securities (2,328) (2,630)
Other, net 55
Net cash used in
investing activities (23,346) (20,800)
---
Cash flows from financing activities:
Proceeds from
revolving line of
credit 193,000 167,000
Payments on revolving
line of credit (435,000) (109,000)
Proceeds from
issuance of senior
notes 350,000
Proceeds from
issuances of common
stock 26,235 16,073
Taxes paid related to
net share settlement
of equity awards (100,067) (51,208)
Repurchases of common
stock (210,000) (178,926)
Other, net (7,651)
Net cash used in
financing activities (183,483) (156,061)
---
Effect of exchange
rate changes on cash (2,654) 710
---
Increase (decrease)
in cash and cash
equivalents 19,247 (11,215)
Cash and cash
equivalents,
beginning of period 106,426 90,023
Cash and cash
equivalents, end of
period $125,673 $78,808
FAIR ISAAC CORPORATION
REVENUE BY SEGMENT
(In thousands)
(Unaudited)
Quarter Ended Nine Months Ended
June 30, June 30,
2020 2019 2020 2019
Applications revenues:
Transactional and
maintenance $98,476 $100,385 $295,102 $294,624
Professional services 32,364 33,989 101,521 101,432
License 10,620 31,263 37,294 59,055
Total applications
revenues $141,460 $165,637 $433,917 $455,111
Scores revenues:
Transactional and
maintenance $130,268 $112,949 $365,324 $300,133
Professional services 58 392 1,141 1,994
License 1,224 1,805 9,371 3,105
Total scores revenues $131,550 $115,146 $375,836 $305,232
Decision Management
Software revenues:
Transactional and
maintenance $18,085 $12,706 $47,479 $37,255
Professional services 11,211 10,213 32,901 32,531
License 11,425 10,547 30,073 24,610
Total decision management
software revenues $40,721 $33,466 $110,453 $94,396
Total revenues:
Transactional and
maintenance $246,829 $226,040 $707,905 $632,012
Professional services 43,633 44,594 135,563 135,957
License 23,269 43,615 76,738 86,770
Total revenues $313,731 $314,249 $920,206 $854,739
FAIR ISAAC CORPORATION
NON-GAAP RESULTS
(In thousands, except per share data)
(Unaudited)
Quarter Ended Nine Months Ended
June 30, June 30,
---
2020 2019 2020 2019
---
GAAP net income $64,076 $64,152 $177,285 $137,540
Amortization of
intangible assets 1,048 1,448 4,046 4,453
Restructuring and
acquisition-related 3,104 -
Stock-based
compensation expense 22,265 19,595 68,198 61,931
Income tax adjustments (5,739) (5,290) (18,546) (17,103)
Excess tax benefit (4,902) (4,289) (38,845) (20,023)
Non-GAAP net income $76,748 $75,616 $195,242 $166,798
GAAP diluted earnings
per share $2.15 $2.12 $5.92 $4.54
Amortization of
intangible assets 0.04 0.05 0.14 0.15
Restructuring and
acquisition-related 0.10 -
Stock-based
compensation expense 0.75 0.65 2.28 2.04
Income tax adjustments (0.19) (0.17) (0.62) (0.56)
Excess tax benefit (0.16) (0.14) (1.30) (0.66)
Non-GAAP diluted
earnings per share $2.58 $2.50 $6.52 $5.51
Free cash flow
Net cash provided by
operating activities $106,871 $68,290 $228,730 $164,936
Capital expenditures (7,907) (7,526) (21,074) (18,170)
Free cash flow $98,964 $60,764 $207,656 $146,766
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
