Introduction#
Fair Isaac Corporation (FICO continues to demonstrate robust financial growth marked by a strong revenue increase and operational efficiency improvements in the fiscal year ending September 2024. Despite a slight stock price pullback of -0.57% to $1326.06 on the NYSE, the company's underlying fundamentals reflect a strategic emphasis on innovation and capital discipline that positions it well in the competitive analytics and decision management sector.
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Financial Performance Highlights#
In fiscal 2024, FICO reported revenue of $1.72 billion, a +13.48% increase from $1.51 billion in 2023, illustrating sustained top-line growth driven by expanding demand for its credit scoring and decision analytics products. Gross profit margin improved slightly to 79.73%, reinforcing the company's ability to maintain high profitability despite increased investment in research and development (R&D), which rose to $171.94 million or 9.41% of revenue, reflecting a commitment to innovation.
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Operating income climbed to $733.63 million, up +14.13% year-over-year, translating to an operating margin of 42.71%, slightly higher than the previous year's 42.47%. Net income rose by +19.43% to $512.81 million, representing a net margin of 29.86%—an encouraging sign of operational leverage and cost management.
Cash Flow and Capital Allocation#
Operating cash flow surged +34.98% to $632.96 million, with free cash flow reaching $624.08 million, supporting the company's aggressive share repurchase program. During fiscal 2024, FICO repurchased approximately $821.7 million in common stock, reflecting management's confidence in intrinsic value and a focus on enhancing shareholder returns.
Capital expenditures remained modest at $8.88 million, consistent with the company's asset-light model emphasizing software and intellectual property development over physical assets.
| Metric | 2024 (USD) | 2023 (USD) | % Change |
|---|---|---|---|
| Revenue | $1.72B | $1.51B | +13.48% |
| Gross Profit | $1.37B | $1.20B | +14.17% |
| Operating Income | $733.63M | $642.83M | +14.13% |
| Net Income | $512.81M | $429.38M | +19.43% |
| Operating Margin | 42.71% | 42.47% | +0.24 pts |
| Net Margin | 29.86% | 28.37% | +1.49 pts |
| R&D Expense | $171.94M | $159.95M | +7.53% |
| Free Cash Flow | $624.08M | $464.68M | +34.30% |
| Share Repurchases | $821.7M | $405.53M | +102.6% |
Balance Sheet and Financial Health#
FICO ended fiscal 2024 with total assets of $1.72 billion, up from $1.58 billion the prior year, driven primarily by increased goodwill and intangible assets reflecting strategic investments in technology and acquisitions. However, the company carries a significant long-term debt load of $2.22 billion, resulting in negative shareholder equity of -$962.68 million.
The current ratio stands at 0.92x, slightly below the ideal benchmark of 1.0, indicating tight liquidity but manageable given the strong cash flow generation. Net debt to EBITDA remains at a moderate 2.89x, suggesting reasonable leverage for a technology company with stable cash flows.
| Balance Sheet Item | 2024 (USD) | 2023 (USD) | % Change |
|---|---|---|---|
| Total Assets | $1.72B | $1.58B | +8.86% |
| Total Liabilities | $2.68B | $2.26B | +18.58% |
| Long-term Debt | $2.22B | $1.86B | +19.35% |
| Stockholders’ Equity | -$962.68M | -$687.99M | -39.91% |
| Cash and Equivalents | $150.67M | $136.78M | +10.14% |
| Current Ratio | 0.92x | 0.92x | 0.00% |
Strategic Initiatives and Market Position#
Under CEO William J. Lansing's leadership, FICO has intensified its focus on leveraging AI and machine learning to enhance its credit scoring models and expand into adjacent markets such as Buy-Now-Pay-Later (BNPL) risk analytics. This strategic pivot aligns with industry trends emphasizing data-driven decision-making in financial services.
The company’s R&D intensity at 9.41% of revenue is above industry averages for software firms, highlighting a sustained commitment to innovation. This investment supports FICO's competitive positioning against peers like Experian and Equifax, particularly in advanced analytics and cloud-based solutions.
Recent earnings surprises, including the Q2 2025 beat where actual EPS reached 8.57 versus an estimate of 7.73, indicate positive market reception to FICO’s growth strategy and operational execution.
Forward-Looking Financial Estimates#
Analyst consensus projects continued robust growth, with revenue expected to climb from approximately $1.98 billion in 2025 to an estimated $3.29 billion by 2029, representing a compound annual growth rate (CAGR) near 13.44%. Earnings per share (EPS) are forecasted to increase from around 29.45 in 2025 to 53.87 by 2029, reflecting operational leverage and margin expansion.
| Year | Estimated Revenue | Estimated EPS |
|---|---|---|
| 2025 | $1.98B | 29.45 |
| 2026 | $2.27B | 35.27 |
| 2027 | $2.62B | 43.40 |
| 2028 | $3.04B | 50.83 |
| 2029 | $3.29B | 53.87 |
What Does This Mean for Investors?#
Investors evaluating FICO should consider the company's strong revenue growth trajectory, expanding profit margins, and high free cash flow conversion as key strengths. The aggressive share repurchase program underscores management’s confidence in the company's valuation and future prospects.
However, the elevated leverage and negative equity warrant monitoring, particularly in volatile credit market conditions. FICO’s ability to sustain innovation spending while managing debt levels will be crucial for maintaining its competitive edge.
Key Takeaways#
- Revenue growth accelerated to +13.48% in FY 2024, supported by strong demand for credit analytics.
- Net income increased +19.43%, with net margins nearing 30%, reflecting operational efficiency.
- Free cash flow surged +34.3%, enabling a substantial increase in share repurchases.
- Leverage rose with long-term debt up 19.35%, resulting in negative equity, requiring close investor attention.
- R&D spend remains robust at 9.41% of revenue, reinforcing innovation-driven strategy.
- Analyst forecasts project sustained double-digit revenue and EPS growth through 2029.
Conclusion#
Fair Isaac Corporation's latest financial results and strategic initiatives reinforce its position as a leader in credit scoring and decision analytics. The company’s robust growth, strong cash generation, and commitment to innovation create a favorable outlook. Nonetheless, investors should weigh the financial leverage against growth opportunities and monitor how effectively management balances capital allocation with strategic investments.
For more detailed historical context and sector comparisons, visit our FICO company analysis hub.
All financial data referenced is sourced from Monexa AI, with market and analyst estimates current as of August 2025.