FICO Announces Earnings of $1.98 per Share for Fourth Quarter Fiscal 2020
SAN JOSE, Calif., Nov. 10, 2020 /PRNewswire/ -- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its fourth fiscal quarter ended September 30, 2020.
Fourth Quarter Fiscal 2020 GAAP Results
Net income for the quarter totaled $59.1 million, or $1.98 per share, versus $54.6 million, or $1.80 per share, in the prior year period. Fourth quarter results included a previously-announced pre-tax charge of $41.9 million for restructuring and impairment losses, or $1.01 per share after tax.
Net cash provided by operating activities for the quarter was $136.2 million versus $95.4 million in the prior year period.
Fourth Quarter Fiscal 2020 Non-GAAP Results
Non-GAAP Net Income for the quarter was $97.0 million versus $60.8 million in the prior year period. Non-GAAP EPS for the quarter was $3.25 versus $2.01 in the prior year period. Free cash flow for the quarter was $135.3 million versus $89.6 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.
Fourth Quarter Fiscal 2020 GAAP Revenue
The company reported revenues of $374.4 million for the quarter as compared to $305.3 million reported in the prior year period.
"We had a remarkably strong finish to another great year," said Will Lansing, chief executive officer. "Even in a period of economic volatility, we delivered record revenues, net income and cash flows."
Revenues for the fourth 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 $168.2 million in the fourth quarter, compared to $149.9 million in
the prior year period, an increase of 12%, due primarily to increased
license sales in our Falcon Fraud, Debt Manager, and Strategy Director
products.
-- Scores revenues, which include the company's business-to-business (B2B)
scoring solutions and associated professional services, and
business-to-consumer (B2C) service, were $152.7 million in the fourth
quarter, compared to $115.9 million in the prior year period, an
increase of 32%. B2B revenue increased 27%, driven largely by higher
mortgage origination volumes and a one-time royalty true-up. B2C revenue
increased 45% from the prior year period due to higher volumes at
myFICO.com, as well as through our partners.
-- Decision Management Software revenues, which include Blaze Advisor(®),
Xpress Optimization, Decision Management Platform and related
professional services, were $53.5 million in the fourth quarter compared
to $39.5 million in the prior year period, an increase of 36%, due
primarily to license sales and 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 fourth 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 November 10, 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 or divestitures, and material adverse developments in global economic conditions or in the markets we serve. Additional information on these risks and uncertainties and other factors that could affect FICO's future results are 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, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 and its subsequent filings with the SEC. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. FICO disclaims any intent or obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30,
September 30,
2020 2019
ASSETS:
Current assets:
Cash and cash equivalents $157,394 $106,426
Accounts receivable, net 334,180 297,427
Prepaid expenses and other current assets 42,504 51,853
Total current assets 534,078 455,706
Marketable securities and investments 26,573 21,865
Property and equipment, net 46,419 53,027
Operating lease right-of-use-assets 57,656 -
Goodwill and intangible assets, net 821,600 817,681
Other assets 119,914 85,169
$1,606,240 $1,433,448
===
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other accrued liabilities $86,400 $55,572
Accrued compensation and employee benefits 117,952 106,240
Deferred revenue 115,159 111,016
Current maturities on debt 95,000 218,000
Total current liabilities 414,511 490,828
Long-term debt 739,435 606,790
Operating lease liabilities 73,207 -
Other liabilities 48,005 46,063
Total liabilities 1,275,158 1,143,681
Stockholders' equity 331,082 289,767
$1,606,240 $1,433,448
===
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Quarter Ended
Year Ended
September 30, September 30,
---
2020 2019 2020 2019
---
Revenues:
Transactional and maintenance $266,028 $228,936 $973,933 $860,948
Professional services 47,477 48,138 183,040 184,095
License 60,851 28,270 137,589 115,040
---
Total revenues 374,356 305,344 1,294,562 1,160,083
---
Operating expenses:
Cost of revenues 93,676 87,996 361,142 336,845
Research & development 46,706 39,396 166,499 149,478
Selling, general and administrative 105,612 105,992 420,930 414,086
Amortization of intangible assets 947 1,673 4,993 6,126
Restructuring and impairment charges 41,925 45,029 -
Total operating expenses 288,866 235,057 998,593 906,535
---
Operating income 85,490 70,287 295,969 253,548
Other expense, net (9,057) (9,399) (38,969) (37,476)
Income before income taxes 76,433 60,888 257,000 216,072
Provision for income taxes 17,307 6,304 20,589 23,948
---
Net income $59,126 $54,584 $236,411 $192,124
Basic earnings per share: $2.04 $1.89 $8.13 $6.63
Diluted earnings per share: $1.98 $1.80 $7.90 $6.34
Shares used in computing earnings per share:
Basic 29,045 28,918 29,067 28,980
===
Diluted 29,833 30,290 29,932 30,294
===
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended
September 30,
2020 2019
---
Cash flows from operating activities:
Net income $236,411 $192,124
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 30,367 31,612
Share-based compensation 93,681 82,973
Changes in operating assets and liabilities (41,308) (55,466)
Other, net 45,765 9,107
Net cash provided by operating activities 364,916 260,350
---
Cash flows from investing activities:
Purchases of property and equipment (21,989) (23,981)
Net activity from marketable securities (2,649) (2,924)
Cash paid for acquisitions, net of cash acquired (15,855)
Other, net 55
Net cash used in investing activities (24,583) (42,760)
---
Cash flows from financing activities:
Proceeds from revolving line of credit 263,000 229,000
Payments on revolving line of credit (513,000) (141,000)
Proceeds from issuance of senior notes 350,000
Payment on senior notes (85,000) (28,000)
Proceeds from issuances of common stock 42,258 22,788
Taxes paid related to net share settlement of equity awards (102,903) (52,996)
Repurchases of common stock (235,223) (228,894)
Other, net (8,556) (945)
Net cash used in financing activities (289,424) (200,047)
---
Effect of exchange rate changes on cash 59 (1,140)
---
Increase in cash and cash equivalents 50,968 16,403
Cash and cash equivalents, beginning of year 106,426 90,023
Cash and cash equivalents, end of year $157,394 $106,426
FAIR ISAAC CORPORATION
REVENUE BY SEGMENT
(In thousands)
(Unaudited)
Quarter Ended Year Ended
September 30, September 30,
2020 2019 2020 2019
Applications revenues:
Transactional and maintenance $98,892 $100,774 $393,994 $395,398
Professional services 35,156 35,826 136,677 137,258
License 34,081 13,323 71,375 72,378
Total applications revenues $168,129 $149,923 $602,046 $605,034
Scores revenues:
Transactional and maintenance $151,700 $115,155 $517,024 $415,288
Professional services 459 163 1,600 2,157
License 552 627 9,923 3,732
Total scores revenues $152,711 $115,945 $528,547 $421,177
Decision Management Software revenues:
Transactional and maintenance $15,436 $13,007 $62,915 $50,262
Professional services 11,862 12,149 44,763 44,680
License 26,218 14,320 56,291 38,930
Total decision management software revenues $53,516 $39,476 $163,969 $133,872
===
Total revenues:
Transactional and maintenance $266,028 $228,936 $973,933 $860,948
Professional services 47,477 48,138 183,040 184,095
License 60,851 28,270 137,589 115,040
Total revenues $374,356 $305,344 $1,294,562 $1,160,083
FAIR ISAAC CORPORATION
NON-GAAP RESULTS
(In thousands, except per share data)
(Unaudited)
Quarter Ended
Year Ended
September 30,
September 30,
---
2020 2019 2020 2019
---
GAAP net income $59,126 $54,584 $236,411 $192,124
Amortization of intangible assets 947 1,673 4,993 6,126
Restructuring and impairment charges 41,925 45,029 -
Stock-based compensation expense 25,483 21,042 93,681 82,973
Income tax adjustments (19,325) (5,836) (37,871) (22,939)
Excess tax benefit (11,192) (10,643) (50,037) (30,666)
Non-GAAP net income $96,964 $60,820 $292,206 $227,618
GAAP diluted earnings per share $1.98 $1.80 $7.90 $6.34
Amortization of intangible assets 0.03 0.06 0.17 0.20
Restructuring and impairment charges 1.41 1.50 -
Stock-based compensation expense 0.85 0.69 3.13 2.74
Income tax adjustments (0.65) (0.19) (1.27) (0.76)
Excess tax benefit (0.38) (0.35) (1.67) (1.01)
Non-GAAP diluted earnings per share $3.25 $2.01 $9.76 $7.51
Free cash flow
Net cash provided by operating activities $136,185 $95,414 $364,915 $260,350
Capital expenditures (916) (5,811) (21,990) (23,981)
Free cash flow $135,269 $89,603 $342,925 $236,369
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
