FICO shares fall 8% after hours despite Q4 profit rise

FICO said adjusted earnings for its fiscal fourth quarter 2026 were $11.10 per share, above the $10.98 consensus estimate, while revenue of $657.05 million was below the $666.78 million estimate.

Shares fell 8.0% in after-hours trading as of 5:32 p.m. ET, from a regular-session close of $701.18.

FICO, which says businesses in more than 70 countries use its solutions, reported GAAP net income of $175.0 million, or $8.12 per share, up from $155.0 million, or $6.42 per share, a year earlier.

Here's how the company did:

• Adjusted EPS: $11.10 vs. $7.74 a year earlier; $10.98 consensus estimate
• GAAP EPS: $8.12 vs. $6.42 a year earlier
• Revenue: $657.05 million vs. $515.75 million a year earlier; $666.78 million consensus estimate
• Non-GAAP net income: $239.3 million vs. $187.0 million a year earlier

Revenue rose 27% from a year earlier. The company said net cash provided by operating activities was $294.2 million, up from $223.7 million, and free cash flow was $284.3 million, up from $210.8 million.

“I am proud of our performance in FY26,” said chief executive officer Will Lansing. “Our team continues to execute well despite a turbulent macro environment.”

Segment results

Scores revenue rose 33% to $413.8 million from $311.6 million a year earlier. Business-to-business revenue increased 39%, primarily from a higher mortgage origination scores unit price, partly offset by lower mortgage originations volume.

Business-to-consumer revenue rose 3%, primarily from higher royalties on scores sold indirectly to consumers through credit reporting agencies.

Software revenue rose 19% to $243.2 million from $204.2 million a year earlier. Software annual recurring revenue was up 14% year over year at Sept. 30, with platform ARR up 72% and non-platform ARR down 18%.

The total software dollar-based net retention rate was 112% at Sept. 30, with platform software at 156% and non-platform software at 82%.

Outlook

The company is transitioning to bespoke mortgage originations pricing, tailored to individual customers. One program, the FICO Preferred Program, has several deals already announced, and the company continues to work on programs covering calendar 2027.

FICO is not providing fiscal 2027 guidance because the pricing transition is still being finalized and the outcomes of mortgage market challenges are uncertain. Elevated interest rates and affordability challenges continue to weigh on the mortgage market, keeping originations below historical norms, the company said.

Its updated fiscal 2026 guidance from its July 29 release called for revenue of $2.53 billion and non-GAAP EPS of $42.43.

Costs and charges

GAAP results included a $65 million accrual for a proposed settlement of antitrust class action lawsuits related to the Scores business. They also included a $48 million non-operating gain from the sale of an equity investment and a $27 million restructuring charge tied to a committed workforce reduction.

The settlement accrual, gain and restructuring charge are excluded from non-GAAP net income and non-GAAP EPS.