FICO 2025-26: Revenue $2.35B (+18%), Mortgage Direct License Live
FY25 (Sep year-end) revenue $1.99B (+16%); op income $925M (+26%); NI $652M (+27%); EPS $26.54 (+30%). Q4 revenue $516M (+14%). Scores +27% FY (Mortgage origination +52% Q4 / +110% Q1). Software +3% FY; Platform ARR +16%. Mortgage Direct License with Xactus live. FICO FFM (Foundation Model) + FICO Marketplace. FY26: revenue $2.35B (+18%); GAAP EPS $33.47 (+26%); non-GAAP EPS $38.17 (+28%).
Key takeaways
- Mortgage origination revenue +52% Q4 / +110% Q1. The growth engine — Mortgage Direct License (MDL) program with Xactus live; FICO Score 10 T adoption accelerating; institutions representing $313B+ in annualized mortgage originations + $1.52T in eligible portfolios under servicing have signed up.
- FY26 revenue $2.35B (+18%); non-GAAP EPS $38.17 (+28%). Strongest growth among major financial software companies. Conservative guide given macro environment + timing complexities in pricing model adoption.
- FICO FFM (Focused Foundation Model) launched. Enterprise fraud solution + FICO platform v2 + FICO Marketplace. Improved accuracy + cost efficiencies vs conventional GenAI. Strategic AWS collaboration.
- Software ARR +4% to $747M; Platform ARR +16% to $263M (35% of total Q4 ARR). Platform momentum compounding; non-platform $484M consistent. NRR 103%-105%.
- $1.4B+ FY25 buyback (vs $822M FY24, +72%). Aggressive capital return; $0.5B+ in Q3 alone. Debt $3.1B (+37% YoY) reflects buyback funding.
Business
Fair Isaac Corporation is the global leader in credit scoring + decision-management software. Two reportable segments + AI / platform expansion:
- Scores (~58% of revenue, fastest growing). FICO Score 8/9/10/10T + B2B (mortgage, auto, credit card, personal loan) + B2C (myFICO). Q4 +25% / FY +27%. B2B mortgage origination revenue Q4 +52%; FY mortgage origination 55% of B2B revenue.
- Software (~42%). On-premises + SaaS + professional services. FICO platform + applications. FY +3%. Platform ARR $263M / +16%; non-platform $484M consistent.
Strategic moves FY25:
- FICO Mortgage Direct License (MDL) program with Xactus launched
- FICO Score 10 T: 18% more defaulters identified in critical deciles vs Vantage 4
- FICO FFM (Focused Foundation Model) for financial services launched
- Enterprise fraud solution on FICO platform launched
- FICO Marketplace launched
- Strategic AWS collaboration
- FICO Score 10 BNPL + FICO Score 10 T BNPL launched
- FICO Score Mortgage Simulator penetration via Xactus
- Kenya-specific FICO score in partnership with TransUnion
- FICO World conference Q3
- $1.4B+ buyback executed FY25
FY25 financial performance (Sep year-end)
| Metric (FY) | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue ($B) | 1.38 | 1.51 | 1.72 | 1.99 |
| Revenue YoY | n/a | +10% | +14% | +16% |
| Op income ($M) | 542 | 643 | 734 | 925 |
| Op margin | 39.4% | 42.5% | 42.7% | 46.5% |
| Net income ($M) | 374 | 429 | 513 | 652 |
| Diluted EPS ($) | 14.18 | 16.93 | 20.45 | 26.54 |
| FCF ($M) | 503 | 465 | 607 | 770 |
| Capex ($M) | -6 | -4 | -26 | -9 |
| Total debt ($B) | 1.91 | 1.90 | 2.24 | 3.07 |
| Buyback ($B) | -1.10 | -0.41 | -0.82 | -1.41 |
The earnings progression: revenue 4-yr CAGR ~13%; op margin 39.4% → 46.5% (+710bp); EPS $14.18 → $26.54 (+87% over 3 yrs). Pure software economics with structural pricing power.
Capital allocation
- Capex: $-9M FY25 (0.5% of revenue, asset-light).
- Dividends: $0 (no dividend).
- Buybacks: $-1.41B FY25 (+72% YoY).
- M&A: Strategic AWS collaboration.
- Debt: $3.07B (+37% YoY) — buyback funding.
- FCF: $770M (+27%).
The capital return story is dominant — $1.4B+ buyback at high returns on capital reflects mgmt confidence in valuation + earnings trajectory.
FY26 outlook (per Q4 FY25 call, 2025-11-05)
| FY26 framework | Detail |
|---|---|
| Revenue | $2.35B (+18%) |
| GAAP net income | $795M (+22%) |
| GAAP EPS | $33.47 (+26%) |
| Non-GAAP net income | $907M (+24%) |
| Non-GAAP EPS | $38.17 (+28%) |
| Software ARR target | Continued mid-to-high single digit |
| Platform ARR | Continued 15%+ growth |
Conservative guide given timing complexities in pricing model adoption — particularly performance-based pricing in MDL program (mortgage process timeline introduces lag).
Key risks
- Macro / mortgage origination volumes. Interest rate fluctuations impact mortgage originations. MDL program + FICO Score 10 T penetration depend on volume environment.
- Pricing model adoption timing. Performance-based pricing model (MDL program) has potential time lags due to mortgage process timeline; could spill into subsequent fiscal years.
- Competition / regulatory. VantageScore competition intensifying; regulator engagement uncertain.
- Industry transition. Transition to FICO Score 10 T affects pricing dynamics + lender choice.
- Software momentum. Platform ARR growth +16% — durability of growth important.
- Macro environment. Q4 mentioned macro uncertainty as guide rationale.
Bottom line
FICO FY25 (Sep year-end) is the structural compounding year: revenue +16%, op margin 46.5% (+380bp), EPS +30%, FCF +27%. Mortgage Direct License + FICO Score 10 T + FICO FFM + Marketplace all launched. FY26 guide of $2.35B revenue (+18%) + $38.17 non-GAAP EPS (+28%) reflects continued acceleration. Risks are mortgage volumes + pricing model timing + competition. Highest-quality financial software compounder with monopoly-like pricing power.
Citations
- Fair Isaac Corp. FY25 (Sep '25) Form 10-K (filed November 2025, SEC EDGAR).
- FICO Q4 FY25 earnings call, 2025-11-05 — FY revenue $1.99B (+16%); Scores +27%; mortgage origination +52% Q4; Software ARR $747M (Platform +16%); FICO Direct License live with Xactus; FY26 guide ($2.35B revenue, $38.17 non-GAAP EPS).
- FICO Q3 FY25 earnings call, 2025-07-31 — Scores +34%; mortgage origination +53%; FICO Score 10 BNPL launched; AWS collaboration.
- FICO Q2 FY25 earnings call, 2025-04-29 — Scores +25%; mortgage origination +48% (54% of B2B); FICO Score Mortgage Simulator via Exactus.
- FICO Q1 FY25 earnings call, 2025-02-04 — Scores +23%; mortgage origination +110%; FICO Score 10 T strong adoption ($261B annualized originations).
- Internal financial_statements view (consolidated annual + cash flow + capital structure).