FICO Beats Q4 as Adjusted EPS Jumps 43% to $11.10, but Withholds FY27 Guidance

Fair Isaac (FICO) reported fiscal fourth-quarter 2026 revenue of $657.0 million, up 27% from a year earlier and above the $652 million estimate, while adjusted EPS of $11.10 rose 43% and beat the $10.71 estimate. The company did not give fiscal 2027 guidance, citing its transition to customized mortgage origination pricing, elevated interest rates and weak origination volumes.

Shares fell about 8% in after-hours trading, to $642.00 from a $701.03 close that was down 3.2% on the day.

Q4 scorecard

Fiscal Q4 2025 revenue was $515.8 million, adjusted EPS was $7.74 and free cash flow was $210.8 million. Fiscal Q3 2026 revenue was $674.2 million, adjusted EPS was $12.18 and free cash flow was $370.3 million. Scores made up 63.0% of fiscal Q4 revenue, against 60.4% a year earlier.

Scores

• Scores revenue. Scores revenue rose 33% to $413.8 million, down from $458.9 million in the third quarter.
• Business-to-business. B2B scores revenue rose 39%, mainly on a higher mortgage origination score unit price, partly offset by lower origination volume.
• Consumer. Consumer (B2C) scores revenue rose 3% on higher royalties from scores sold indirectly through credit reporting agencies.

Software

• Software revenue. Software revenue rose 19% to $243.2 million, up from $215.3 million in the third quarter.
• Recurring revenue. Software annual recurring revenue (ARR) rose 14%. Platform ARR rose 72%, while non-platform ARR fell 18%.
• Retention. Dollar-based net retention was 156% for platform products, 112% for total software and 82% for non-platform. Platform net retention was 148% in the third quarter and 112% a year earlier.

Earnings and one-time items

• GAAP. GAAP net income rose 12.9% to $175.0 million, and GAAP diluted EPS rose to $8.12 from $6.42. Non-GAAP net income rose to $239.3 million from $187.0 million.
• One-time items. The quarter included a $65 million accrual for a proposed settlement of Scores-related antitrust class actions, a $27 million restructuring charge for a workforce reduction plan and a $48 million non-operating gain on the sale of a minority equity stake.

Cash flow, debt and buybacks

• Free cash flow. Fourth-quarter free cash flow rose 35% to $284.3 million, above the $238 million estimate. Fiscal 2026 free cash flow was $1,034.4 million, against $739.4 million in fiscal 2025.
• Debt. Total debt was about $5.26 billion at Sept. 30, down about $323 million from $5.58 billion at June 30 and up from about $3.06 billion a year earlier.
• Buybacks. Fiscal 2026 share repurchases totaled $3,046.0 million, the same as the nine-month total, which means FICO repurchased no shares in the fourth quarter.

Fiscal 2026 results

Fiscal 2026 revenue rose 27% to $2,534.9 million, and adjusted EPS rose 44% to $42.99 from $29.88. GAAP diluted EPS was $36.32, against $26.54. FICO's July guidance called for fiscal 2026 revenue of $2.53 billion and adjusted EPS of $42.43, so full-year adjusted EPS finished 1.3% above that point estimate.

Outlook

FICO said it is not providing fiscal 2027 guidance at this time, and gave no first-quarter outlook. The company said programs and agreements for customized mortgage origination pricing are still being finalized, and that elevated interest rates and affordability challenges are keeping originations below historical norms. FICO has announced several customized pricing deals, including its Preferred Program, and is still working on programs covering calendar 2027. CEO Will Lansing said the team "continues to execute well despite a turbulent macro environment."

What to watch

• Guidance. When FICO provides fiscal 2027 guidance, and what it assumes for mortgage score pricing and origination volumes.
• Pricing programs. Whether more customized mortgage pricing agreements are announced for calendar 2027.
• Platform. Whether platform ARR growth stays near 72% as non-platform ARR keeps declining.
• Related coverage. See our reports on Zillow and Dave.

Sources: Results are from Fair Isaac's fiscal fourth-quarter 2026 report. Estimates are consensus figures. Prior guidance and comparison figures are from the company's earlier releases. This article is informational only and is not investment advice.

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