Fair Isaac Corporation (FICO)

Fair Isaac told the SEC on 6 October that its management committed on 1 October to a plan to eliminate approximately 15 percent of positions 2. The plan reduces layers in the organization, simplifies the operating structure and integrates AI-driven product development 2. The company expects about $27.0 million of pre-tax charges in its fiscal fourth quarter and expects the plan to be substantially completed by the end of the third quarter of fiscal 2027 2.

The cut follows a quarter ended 30 June 2026 in which revenue was $674.2 million against $536.4 million a year earlier, up 26 percent, and net income was $237.2 million 1. Scores revenue rose 41 percent to $458.9 million, and business-to-business scores revenue rose 49 percent, mainly on a higher mortgage origination scores unit price 1.

HousingWire reported that in early September the Federal Housing Finance Agency said lenders approved by Fannie Mae and Freddie Mac could use either Classic FICO or VantageScore 4.0 for loans sold to them 7. At the end of September, FHFA Director Bill Pulte said both would apply a single loan-level pricing grid to mortgages scored with either model 7.

HousingWire also reported that Rocket Mortgage plans to make VantageScore 4.0 its default credit model for eligible loans starting in the fourth quarter of 2026 7. Reuters reported that the restructuring is part of a broader move to integrate AI 6. The fiscal 2026 annual report and fourth-quarter results are the next filings that would show the cost and the effect 2.

Fair Isaac was founded in 1956 on the premise that data, used intelligently, can improve business decisions 4. It introduced the FICO Score in the U.S. in 1989 4. The score is a three-digit number from 300 to 850 that rates a consumer's credit risk 4.

FICO Score 9 used reported rental payment history and de-emphasized medical debt 4. FICO Score 10 and 10 T followed in 2020, and 10 T adds trended credit data, a longer look at how a person manages credit 4.

Scores revenue rose from $528.5 million in fiscal 2020 to $654.1 million in 2021, up 24 percent, mainly on a higher unit price across several offerings and higher volumes 8. Software revenue fell from $766.0 million to $662.4 million in 2021, in part after the company divested its C&R business in June 2021 8.

Total revenue then grew from $1,377.3 million in fiscal 2022 to $1,513.6 million in 2023 and $1,717.5 million in 2024 94. In 2024 Scores revenue rose $145.8 million on a higher unit price, partly offset by fewer mortgage originations 9. Business-to-consumer scores revenue fell $5.0 million that year, on lower direct sales through the myFICO.com website 9.

Fiscal 2025 revenue was $1,990.9 million, up 16 percent, with Scores revenue up 27 percent to $1,168.6 million 4. The company said the Scores increase came mainly from a higher unit price, more mortgage originations and a multi-year license renewal on its insurance score 4. Software revenue rose 3 percent to $822.3 million 4.

Operating income rose 26 percent to $924.9 million and net income rose 27 percent to $651.9 million, after $10.9 million of restructuring charges 4. The Software segment's recurring revenue was $747.3 million at 30 September 2025, up 4 percent 4.

In fiscal 2025 it repurchased 0.8 million shares for $1.4 billion and issued $1.5 billion of senior notes to repay term loans 4. In March 2026 it closed $1.0 billion of 6.250% senior notes due 2034 11.

On 5 June 2026 the company borrowed a $1.5 billion incremental term loan maturing 15 May 2028 5. It used the money for an accelerated share repurchase, a deal in which a bank delivers shares up front and the final count is set later 5. At 30 June 2026 the balance sheet showed long-term debt of $5,282.4 million and a stockholders' deficit of $4,097.1 million 1.

Scores: the FICO Score and its relatives

The Scores segment sells business-to-business scoring and business-to-consumer scores, including myFICO.com subscriptions 4. Users generally pay the consumer reporting agencies a fee for each score, and those agencies pay the company a fee 4. The company does not store the consumer credit data behind its scores, and the score is used by 90 percent of top U.S. lenders 41.

Scores made up 59 percent of fiscal 2025 revenue, or $1,168.6 million 4. In the June 2026 quarter, business-to-consumer revenue rose 5 percent, mainly on royalties from scores sold to consumers indirectly through the credit reporting agencies 1.

For thin credit files the company offers FICO Score XD, built on public records, property data and phone and cable payments, and the UltraFICO Score, built on bank-account data the consumer permits it to use 4. In fiscal 2025 it launched BNPL versions of FICO Score 10 and 10 T, noting the growing importance of such loans in the U.S. credit system 4.

FICO commissioned Milliman to compare its Score 10 T with VantageScore 4.0, and the report says 10 T shows the highest measure of predictive power across all model fit statistics and mortgages 13. The report is the company's own commissioned work, so it is a claim of the sponsor 13.

Software and FICO Platform

The Software segment sells pre-configured analytics and decision tools for account origination, customer management, fraud detection and marketing, plus FICO Platform, a modular cloud product 4. Software is typically sold as multi-year subscriptions with payments based on usage such as accounts or transactions 4.

In the June 2026 quarter Software revenue was $215.3 million, up 2 percent 1. Annual recurring revenue was up 10 percent, with platform ARR up 62 percent and non-platform ARR down 17 percent 1. The dollar-based net retention rate, which tracks how existing customers' spending changed, was 109 percent 1.

The company says it keeps investing so that substantially all of its software runs on FICO Platform in the future 4. In fiscal 2025 it launched FICO Marketplace, which gives access to data, AI models, optimization tools and decision rulesets 4.

Rivals

In scores, the company names the three U.S. credit reporting agencies as both partners and competitors, and VantageScore, a joint venture of those three agencies, as a rival product 4. For consumers it names Credit Karma, Credit Sesame, Experian and TransUnion 4.

In fraud software for banking it names Nice Actimize, Experian, Pegasystems, BAE Systems Applied Intelligence, SAS, ACI Worldwide, IBM, Feedzai and Featurespace 4. In customer origination it names Experian, Equifax, Moody's, MeridianLink and CGI 4.

HousingWire reported that United Wholesale Mortgage pulls both scores and uses the strongest qualifying one for each borrower 7. It also reported that PennyMac Financial Services completed a rollout of VantageScore 4.0 across its mortgage production platform 7.

People and workforce

Will Lansing is chief executive officer, and Steven Weber is executive vice president and chief financial officer 12. The company is based in Bozeman, Montana, and leases offices in many places for sales, research and data centers 24.

The company had 3,811 employees at fiscal year-end, up from 3,586 a year earlier 4. At the annual meeting on 4 March 2026 stockholders elected all the board's nominees and approved two charter changes, one allowing exculpation of officers and one removing a supermajority vote requirement 12.

Problems and legal

The company is a defendant in consolidated putative class actions in the Northern District of Illinois that allege antitrust claims over the distribution of FICO Scores, along with the three credit bureaus 3. The court dismissed all claims except a Sherman Act Section 2 claim against the company, which went on to discovery 3.

The umbrella, in words

The main brands are the FICO Score, myFICO.com for consumers, UltraFICO, FICO Score XD, FICO Platform and FICO Marketplace 4. The annual report's Exhibit 21.1 lists the subsidiaries, among them HNC Software LLC and myFICO Consumer Services Inc. in the U.S. and Fair Isaac Europe Limited in England and Wales 10.

The balance sheet shows 1,000 thousand preferred shares authorized and none issued 4. Capital Research Global Investors reported owning 1,296,893 shares, 5.6 percent of the class 14.

Vanguard Capital Management reported owning 7.31 percent of the common stock as of 31 March 2026 15. The annual report says the company leased office facilities in many places, with its headquarters in Bozeman, Montana 4.

On 29 July 2026 the company updated its fiscal 2026 guidance 1. It now gives revenue of $2.53 billion, GAAP net income of $850 million and non-GAAP net income of $979 million, up from $2.45 billion, $825 million and $946 million before 1.

The workforce plan is meant to be substantially completed by the end of the third quarter of fiscal 2027, with about $27.0 million of charges in the fourth quarter of fiscal 2026 2. The company said the expected timing, scope and costs are forward-looking statements 2.

The accelerated share repurchase was expected to complete by 30 September 2026, after which the company expected $500 million to remain under its $2.0 billion authorization 5. The company disclosed an initial delivery of approximately 1,055,100 shares 5.

The $1.5 billion term loan is repaid in quarterly installments of $75 million from 30 September 2026 through 30 June 2027 and $112.5 million after that 5. The loan matures on 15 May 2028 5.

The company says it intends to defend the remaining antitrust claim vigorously, and discovery continues 3. HousingWire reported that Rocket Mortgage plans to default to VantageScore 4.0 from the fourth quarter of 2026 7.

The company's Software strategy is to run substantially all its software on FICO Platform over time, and it describes continued investment in Platform capabilities 4. The fourth-quarter results and the fiscal 2026 annual report are the filings that would report the year's totals 2.

Affected employees were notified beginning the week of 5 October 2026 2. The company held a webcast on 29 July 2026 to report third-quarter results and give strategic and operational updates 1.

The $1.0 billion of 6.250% senior notes due 2034 pay interest on 15 March and 15 September each year 11. The credit agreement also keeps a $1.0 billion unsecured revolving credit facility, with an option to request more term loans or increases 5.