Stock Analysis · Fair Isaac Corporation (FICO)
Overview
Fair Isaac Corporation (FICO) is a software and analytics company best known for the FICO® Score, a credit-risk score widely used by lenders. In simple terms, the company sells tools that help banks and other organizations decide “how risky is this customer?” and “what is the best decision to make right now?” across areas such as consumer lending, credit cards, fraud, and account management.
FICO generally earns money in two main ways: (1) ongoing usage-based fees tied to credit scoring and (2) software products that help organizations automate decisions (often sold as subscriptions, licenses, and related services). In its reporting, FICO groups revenue into operating segments that typically include a Scores business and a Software business, with Scores commonly the larger contributor. (Exact segment percentages can vary by fiscal year and should be read directly from the most recent annual report segment note.)
Main revenue streams (from largest to smallest, based on the company’s segment structure):
- Scores: Fees tied to the use of FICO credit scores (e.g., when a lender pulls a score).
- Software: Decisioning and analytics software (subscriptions/licenses) plus related maintenance and professional services.
From a high-level profitability view, FICO has shown expanding revenue and operating income over recent years, with total revenue rising from about $1.32B (FY2021) to about $1.99B (FY2025), while operating income increased from about $513M to about $936M over the same period.
Across the period shown, revenue and operating income trend upward, indicating that spending has not risen as fast as sales. Interest expense also increased (from roughly $40M to about $134M), which matters when evaluating leverage and financial flexibility.
Key Figures
| Metric | Value | Industry ⓘ |
|---|---|---|
| Date | Feb 07, 2026 | |
| Context | ||
| Sector | Technology | |
| Industry | Software - Application | |
| Market Cap ⓘ | $33.00B | |
| Beta ⓘ | 1.27 | |
| Fundamental | ||
| P/E Ratio ⓘ | 51.54 | 27.79 |
| Profit Margin ⓘ | 31.89% | 6.02% |
| Revenue Growth ⓘ | 16.40% | 15.80% |
| Debt to Equity ⓘ | -178.78% | 25.15% |
| PEG ⓘ | 1.23 | |
| Free Cash Flow ⓘ | $735.08M | |
FICO’s market capitalization is about $33.0B. The stock’s beta of ~1.27 indicates it has tended to move more than the broader market. Profitability stands out: the latest profit margin is ~31.9%, well above the industry median shown (~6.0%). Recent year-over-year revenue growth is ~16.4%, roughly in line with the industry median shown (~15.8%). The latest P/E ratio is ~51.5 versus an industry median near 27.8, implying the market is valuing FICO at a higher multiple than many peers. Free cash flow over the last twelve months is about $735M. The debt-to-equity ratio is negative, which typically reflects negative shareholders’ equity (often influenced by large share repurchases and capital structure choices), making this ratio harder to interpret than it is for companies with positive equity.
Growth (Medium)
FICO operates in markets supported by long-term demand for better credit decisions, fraud prevention, and automated analytics. Lenders and financial institutions continuously need to measure risk, comply with internal policies, and manage portfolios through economic cycles. That ongoing need can support recurring revenue—especially for scoring, where the value increases as usage scales across the lending ecosystem.
The company’s strategy is closely tied to (1) maintaining the relevance and acceptance of its scoring models and (2) expanding software platforms used for real-time decisioning (for example, determining approvals, credit limits, pricing, and fraud actions). A key growth lever is continued adoption of newer scoring models and broader software penetration into large enterprises where decision automation can reduce losses and improve efficiency.
Revenue growth has been mostly positive in recent years and reached the mid-teens most recently (about 16% year over year). The pattern is not perfectly smooth—there are periods of slower growth—but the more recent quarters shown are consistently positive.
Free cash flow has increased meaningfully over time, rising from roughly $461M (TTM ending 2021-03-31) to about $677M (TTM ending 2025-03-31), with the latest metric table showing about $735M TTM. For a software and analytics company, sustained cash generation can support reinvestment in product development and capital structure decisions.
Risks (High)
This article is for informational purposes only and does not constitute financial advice. Some content is AI-generated. See Disclaimer
