Fair Isaac (NYSE:FICO) executives highlighted double-digit top-line growth and strong performance in the company’s Scores segment during its fiscal first-quarter 2026 earnings call, while reiterating full-year guidance amid what management described as continued macro uncertainty.
Quarterly results and capital returns
FICO reported first-quarter revenue of $512 million, up 16% year-over-year. GAAP net income was $158 million, up 4%, and GAAP earnings were $6.61 per share, up 8%. On a non-GAAP basis, net income was $176 million, up 22%, and non-GAAP earnings were $7.33 per share, up 27%.
FICO continued returning capital through repurchases, buying back 95,000 shares during the quarter at an average price of $1,707 per share for a total cost of $163 million.
Scores segment led growth, with mortgage a major driver
Scores segment revenue was $305 million, up 29% from the prior year. CFO Steve Weber said business-to-business (B2B) Scores revenue increased 36%, driven primarily by higher mortgage origination scores unit pricing and increased mortgage origination volume. Business-to-consumer (B2C) Scores revenue grew 5%, led mainly by indirect channel partners.
Mortgage originations revenue rose 60% year-over-year and represented 51% of B2B Scores revenue and 42% of total Scores revenue, the company said. Auto originations revenue increased 21%, while credit card, personal loan, and other originations revenue increased 10%.
During Q&A, management said it had not seen changes in credit card activity related to market chatter around a potential 10% cap on card APRs. CEO Will Lansing added that if such a policy were implemented, it could increase pressure on lenders to more carefully understand subprime credits, potentially requiring additional underwriting work involving FICO Scores and credit data. The company did not provide a breakout of credit card origination revenue.
Direct Licensing Program expands; FICO Score 10T timing remains uncertain
Management emphasized continued progress in the FICO Mortgage Direct Licensing Program, which the company said is designed to streamline score access, enhance price transparency, and reduce breakage fees for lenders. FICO announced four new strategic reseller participants—Xactus, Cotality, Ascend Companies, and CIC Credit—and said it signed a Direct License Program agreement to add MeridianLink, which it described as a key platform provider in the mortgage industry.
Lansing said one large reseller was close to completing production integration testing, while another had completed that testing and was now working on downstream system integration testing. However, executives repeatedly declined to provide specific go-live timelines, citing the need for the mortgage industry to have “everything extremely buttoned up.” In response to an analyst question, management estimated that the five resellers discussed on the call represented “somewhere in the 70%-80% range” of the total reseller market.
FICO also discussed the upcoming rollout of FICO Score 10T. Management said the Direct License Program currently supports Classic FICO and expects FICO Score 10T to be available for direct licensing in both conforming and non-conforming markets in the first half of calendar 2026. At the same time, the company said it does not have a timeline for when government-sponsored enterprises or the FHFA will make 10T generally available for broader market use, noting that the agencies are still testing and have not published a schedule.
Lansing described FICO Score 10T as “a meaningful step forward in credit risk assessment,” citing improvements in predictive accuracy, fairness, and model stability versus alternatives. He said the company has “nearly doubled” the number of lenders in its 10T adopter program over the last year, representing more than $377 billion in annual originations and more than $1.6 trillion in eligible servicing volume, with most making multiyear commitments to use FICO Scores for mortgage decisions in both conforming and non-conforming markets.
Questions on mortgage-related loan-level price adjustment (LLPA) grids were a recurring theme. Lansing said the company does not know when LLPA grids will be released and pointed to “tremendous challenges” including gaming and adverse selection. He also cited internal research indicating FICO scores and VantageScore differ by more than 20 points “30% of the time,” in both directions, making straightforward substitution difficult.
Software segment: record bookings, platform mix shift continues
Software segment revenue was $207 million, up 2% year-over-year. Weber reported record software ACV bookings of $38 million in the quarter, which included an “above-average-sized international multi-use case platform deal.” Trailing 12-month ACV bookings reached $119 million, up 36% from the same period last year, and management said recent bookings performance increased confidence that ARR growth will accelerate in fiscal 2026.
Total software ARR was $766 million, up 5% year-over-year. Platform ARR rose 33% to $303 million, representing 40% of total ARR, while non-platform ARR declined 8% to $463 million. Weber said platform ARR growth benefited from new customer wins, expanded use cases and volumes from existing customers, and the migration of the non-platform LiquidCredit solution to the platform. Excluding that migration, platform ARR growth was in the “high 20% range,” he said.
Dollar-based net retention was 103% overall, including platform net retention of 122% and non-platform net retention of 91%. Management said FICO now has more than 150 customers on FICO Platform, with more than half using the platform for multiple use cases. In Q&A, Lansing described land-and-expand dynamics as roughly “neck and neck,” with expansions coming from both increased usage of initial use cases and the adoption of new use cases.
Within software revenue, SaaS grew 12% driven by the platform, while on-premises revenue declined 12% due to lower point-in-time revenue. Weber reiterated that fiscal 2026 guidance assumes lower point-in-time revenue because of fewer non-platform license renewal opportunities versus the prior year.
Expenses, margins, balance sheet, and guidance stance
Operating expenses were $278 million, compared to $279 million in the prior quarter, which included $10.9 million in restructuring charges. Excluding restructuring, expenses increased 4% quarter-over-quarter, mainly due to personnel costs. Weber said operating expense dollars are expected to trend upward modestly through the fiscal year.
Non-GAAP operating margin was 54%, compared to 50% in the same quarter last year, representing 432 basis points of expansion, the company said. The quarter’s net effective tax rate was 17.5%, while the operating tax rate was 25.7%; Weber attributed much of the difference to $15.7 million of excess tax benefits from employee stock awards. FICO maintained expectations for a 24% full-year net effective tax rate and a 25% operating tax rate.
FICO ended the quarter with $218 million in cash and marketable investments and $3.2 billion in total debt at a weighted average interest rate of 5.22%. Weber said 87% of debt was in senior notes with no term loans, and the company had a $415 million balance on its revolving credit line.
While management said it had “another strong quarter” and reiterated fiscal 2026 guidance, executives said they opted not to raise outlook only three months into the year given uncertainty around the macro environment, interest rates, and volumes. Lansing said FICO would revisit guidance on the second-quarter call.
About Fair Isaac (NYSE:FICO)
Fair Isaac Corporation, commonly known as FICO, is a data analytics and software company best known for its FICO Score, a widely used credit-scoring system that helps lenders assess consumer credit risk. Founded in 1956 by Bill Fair and Earl Isaac, the company has evolved from its origins in statistical credit scoring to a broader focus on predictive analytics, decision management and artificial intelligence-driven solutions for financial services and other industries. FICO is headquartered in San Jose, California, and operates globally, serving clients across North America, Latin America, Europe, the Middle East, Africa and the Asia-Pacific region.
FICO’s product portfolio centers on analytics and decisioning technologies.
