Fair Isaac FICO posted a strong second-quarter fiscal 2026, with non-GAAP earnings of $12.5 per share, beating the Zacks Consensus Estimate by 13.33% and rising 60.1% from the year-ago quarter.
Revenues were $692 million, beating the consensus mark by 10.64% and increasing 38.7% year over year.
Results reflected sharp momentum in credit-related activity, highlighted by a 127% year-over-year jump in mortgage originations revenue, alongside continued execution in the company’s decisioning software strategy.
FICO Benefits From Scores Business
Scores segment revenue rose 60% year over year to $475.0 million, underscoring the durability of FICO’s franchise in U.S. credit markets. Growth was led by the business-to-business channel, where revenue increased 72% from the prior-year period, benefiting from higher mortgage origination scores, unit pricing and higher mortgage origination volumes.
Fair Isaac Corporation Price, Consensus and EPS Surprise
Fair Isaac Corporation price-consensus-eps-surprise-chart | Fair Isaac Corporation Quote
Business-to-consumer Scores revenue increased 5% year over year, supported mainly by indirect channel partners. Within originations, auto revenue grew 13%, and credit card, personal loan, and other originations increased 6% year over year compared with the year-ago quarter, indicating broader-based demand beyond mortgages. Mortgage originations revenues rose 127% year over year.
Fair Isaac Gains From Software Platform Revenue
Software revenue increased 7% year over year to $216.7 million, supported by continued penetration of the FICO Platform. Platform revenue climbed 54% from the prior-year quarter, while non-platform revenue declined 12%, largely due to migrations.
Total software annual recurring revenue (ARR) was $789 million, up 10% year over year, with platform ARR of $349 million rising 49% and representing 44% of total ARR. Dollar-based net retention rate was 109%, including 136% for platform and 90% for non-platform, reflecting expansion in platform use cases and volumes even as legacy products face headwinds.
FICO’s Operating Details
Research and development expenses, as a percentage of revenues, contracted 120 basis points (bps) on a year-over-year basis to 7.8%. Selling, general, and administrative expenses, as a percentage of revenues, decreased 330 bps year over year to 20.8%.
Non-GAAP operating margin expanded to 65% from 58% in the year-ago period, as revenue growth outpaced incremental spending.
Adjusted EBITDA increased 55.8% year over year to $448.5 million in the reported quarter. The adjusted EBITDA margin in the fiscal second quarter of 2026 was 64.8% compared with 57.7% in the fiscal second quarter of 2025.
Fair Isaac’s Balance Sheet and Cash Flow
As of March 31, 2026, FICO had $219.4 million in cash and cash equivalents compared with $162 million as of Dec. 31, 2025. Total debt was $3.64 billion.
Cash flow from operations was $223 million in the fiscal second quarter compared with $174 million in the prior quarter. Free cash flow was $214.3 million in the reported quarter compared with $165.3 million reported in the prior quarter.
FICO continued to prioritize capital returns. The company repurchased 484,000 shares for $605 million at an average price of $1,251 per share, cited as its largest quarterly repurchase in dollar terms.
FICO Raises Full-Year 2026 Outlook After Strong First Half
Reflecting the first-half performance, management raised full-year fiscal 2026 guidance.
Revenue is now expected to be $2.45 billion, up from the prior view of $2.35 billion.
On a non-GAAP basis,earnings are projected to be $40.45 per share.
FICO’s Zacks Rank & Stocks to Consider
FICO currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices ADI, Advanced Energy AEIS, and Arista Networks ANET. Each stock currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 41.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Shares of Advanced Energy have surged 76.3% in the year-to-date period. Advanced Energy is slated to report first-quarter 2026 results on May 4.
Arista Networks shares have gained 26.1% in the year-to-date period. Arista Networks is set to report first-quarter 2026 results on May 5.
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