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FICO Announces Earnings of $0.86 per Share for First Quarter Fiscal 2018

January 25, 2018

FICO Announces Earnings of $0.86 per Share for First Quarter Fiscal 2018

Investor / Financial Information January 25, 2018

SAN JOSE, Calif. – January 25, 2018 -

FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced results for its first fiscal quarter ended December 31, 2017.

First Quarter Fiscal 2018 GAAP Results
Net income for the quarter totaled $27.3 million, or $0.86 per share, versus $37.9 million, or $1.16 per share, reported in the prior year period.

The current quarter earnings include a charge of $11.8 million, or $0.37 per share, related to the enactment of the Tax Cuts and Jobs Act in December 2017. The charge encompasses several elements, including a tax on the deemed repatriation of previously untaxed accumulated earnings and profits of its foreign subsidiaries, and the remeasurement of its deferred tax assets arising from a lower U.S. corporate tax rate. In addition, the company recorded a reduction to income tax expense of $11.5 million, or $0.36 per share, related to excess tax benefits associated with stock compensation.

Net cash provided by operating activities for the quarter was $28.8 million versus $33.0 million in the prior year period.

First Quarter Fiscal 2018 Non-GAAP Results
Non-GAAP Net Income for the quarter was $41.1 million vs. $33.5 million in the prior year period. Non-GAAP EPS for the quarter was $1.30 vs. $1.03 in the prior year period. Free cash flow for the quarter was $24.7 million vs. $28.0 million in the prior year period. The Non-GAAP financial measures are described in the financial table captioned “Non-GAAP Results” and are reconciled to the corresponding GAAP results in the financial tables at the end of this release.

First Quarter Fiscal 2018 GAAP Revenues
The company reported revenues of $235.3 million for the quarter as compared to $219.6 million reported in the prior year period. 

“We’re off to a good start in 2018, as we continue to expand our recurring revenue base,” said Will Lansing, chief executive officer. “Our Scores segment is performing particularly well, as we drive growth in both B2B and B2C.”

Revenues for the first quarter of fiscal 2018 across each of the company’s three operating segments were as follows:

  • Applications revenues, which include the company’s preconfigured decision management applications and associated professional services, were $141.4 million in the first quarter compared to $134.8 million in the prior year quarter, an increase of 5%, due primarily to increased transactional revenue in Customer Communications Services.
  • Scores revenues, which include the company’s business-to-business (B2B) scoring solutions and associated professional services as well as business-to-consumer (B2C) service, were $69.9 million in the first quarter compared to $59.4 million in the prior year quarter, an increase of 18%. B2B revenue increased 13% and B2C revenue increased 27% from the prior year quarter.
  • Decision Management Software revenues, which include Blaze Advisor®, Xpress Optimization and related professional services, were $24.0 million in the first quarter compared to $25.4 million in the prior year quarter, a decrease of 6%, due primarily to decreased license sales of Blaze Advisor®.

Outlook 
The company is updating guidance for fiscal 2018 to reflect the impacts of tax reform legislation:

 

Previous Fiscal 2018 Guidance without Excess Tax Benefit

Tax Reform Rate Impact *

Tax Items **

Updated Fiscal 2018 Guidance

Revenue

$990 million

-

-

$990 million

GAAP Net Income

$119 million

$14 million

$3 million

$136 million

GAAP EPS

$3.71

$0.44

$0.10

$4.34***

Non GAAP Net Income

$171 million

$20 million

-

$191 million

Non GAAP EPS

$5.32

$0.63

-

$6.09***

*   The company expects a reduction in tax expense of $14.0 million as a result of a tax rate change from tax reform legislation.
** Includes excess tax benefits associated with stock compensation of $20.0 million, or $0.64 per share, and a full-year tax charge of $17.0 million, or $0.54 per share, associated with tax reform legislation.
*** The EPS numbers do not cross foot due to updated guidance assuming FY diluted share count of 31.3 million shares.

The Non-GAAP financial measures are described in the financial table captioned “Reconciliation of Non-GAAP Guidance.”

Company to Host Conference Call
The company will host a webcast today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to report its first quarter fiscal 2018 results and provide various strategic and operational updates. The call can be accessed at FICO's web site at www.FICO.com/investors.  A replay of the webcast will be available through January 25, 2019.

The webcast will also be distributed through the Thomson StreetEvents Network to both institutional and individual investors. The webcast can be accessed via Thomson’s password-protected event management site, StreetEvents (www.streetevents.com).

About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 165 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.

Learn more at http://www.fico.com

Join the conversation at https://twitter.com/fico & http://www.fico.com/en/blogs/

FICO is a registered trademark of Fair Isaac Corporation in the US and other countries.

Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering initiative, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to protect such data, the failure to realize the anticipated benefits of any acquisitions, material adverse developments in global economic conditions or in the markets we serve, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2017. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.

Q1 2018 Earnings Release Financials

Media Contact:
Greg Jawski
Porter Novelli for FICO
+1 212-601-8248
greg.jawski@porternovelli.com
Investors/Analysts:
Steven Weber
FICO
+1 800-213-5542
investor@fico.com

Newsroom Contacts

Greg Jawski
Americas

greg.jawski@porternovelli.com
+1 212-601-8248

Darcy Sullivan
Europe, Middle East & Africa

dsullivan@fico.com
+44 (0) 209-940-8719

Saxon Shirley
Asia Pacific

saxonshirley@fico.com
+65 6422-7795

Marisa Arribas
Latin America

marisaarribas@fico.com
+1 786 482 7231

Camila Placa
Brasil

camilaplaca@fico.com
+55 11 5189-8258