Q3 2026 Fair Isaac Corp Earnings Call Transcript
Key Points
- Fair Isaac Corp (FICO) reported strong Q3 fiscal 2026 results with total revenues of $674 million, up 26% year-over-year, and non-GAAP EPS of $12.18, up 42%.
- The Scores segment delivered exceptional growth, with revenues up 41% year-over-year, driven by a 49% increase in B2B revenues, primarily from higher mortgage origination score unit prices.
- FICO's platform business achieved a key milestone, with platform ARR exceeding non-platform ARR for the first time, growing 62% year-over-year to $413 million, reflecting successful execution of the land-and-expand strategy.
- The FICO Score 10T adopter program has expanded to 70 lenders, representing about 55% of the volume from the top 50 mortgage originators, and independent analysis by Milliman confirmed its predictive advantage over VantageScore.
- The company raised its full-year fiscal 2026 guidance, now expecting revenues of $2.53 billion (up 20% YoY) and non-GAAP EPS of $42.43 (up 42% YoY), driven by strong execution and a better-than-expected mortgage market.
- The mortgage market remains challenged by elevated interest rates and affordability issues, keeping loan originations below historical norms and causing a sequential decline in mortgage origination revenue.
- The Direct Licensing Program (DLP) for mortgage scores is still awaiting certification from one of the GSEs, delaying its go-live and the associated performance model pricing benefits.
- The VantageScore pilot program under the GSEs' Lender Choice policy is enabling score shopping, which could lead to market share erosion for FICO in the conforming mortgage market, with gaming expected to reach theoretical maximums in the 20% range.
- Software segment revenue growth was modest at 2% year-over-year, weighed down by a 25% decline in non-platform revenue due to product migrations and end-of-life initiatives, as well as lower point-in-time license revenue.
- Operating expenses increased 8% year-over-year in Q3, driven by marketing for FICO World and personnel costs, with Q4 expenses expected to be modestly higher due to front-loaded marketing for the Accenture partnership and restructuring charges.
Good day, and welcome to the Q3 2026 FICO earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
It is now my pleasure to introduce Dave Singleton. Please go ahead.
Good afternoon, and thank you for attending FICO's third-quarter earnings call. I'm Dave Singleton, Vice President of Investor Relations, and I'm joined today by our CEO, Will Lansing; and our CFO, Steve Weber. Today, we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison with the prior quarter to facilitate an understanding of the run rate of the business.
Certain statements made in this presentation are forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many risks and uncertainties that could cause actual results to differ materially. Information concerning these risks and uncertainties is contained in the
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