FICO Reports Strong Revenue Growth and Record Free Cash Flow in Q4 2024
2024-11-24
Fair Isaac Corporation (FICO) convened its 2024 Q4 earnings call, featuring key participants like Dave Singleton and William Lansing, to delve into the company's financial performance and future prospects. Throughout the call, emphasis was placed on the risks and uncertainties associated with forward-looking statements, underlining a cautious approach.
CEO Will Lansing underscored several financial highlights, notably a 16% surge in fourth-quarter revenues to $454 million and a 13% increase in full fiscal year revenue to $1.718 billion. FICO disclosed a GAAP net income per share of $20.45 for the entire fiscal year, marking a 19% uptick from the previous year.
On the non-GAAP front, FICO unveiled $163 million in non-GAAP net income for the quarter, accompanied by non-GAAP earnings per share of $6.54, reflecting a substantial 30% rise from the prior year. The company also achieved a record free cash flow of $219 million in the fourth quarter, totaling $607 million over the last four quarters, showcasing a robust 31% year-over-year increase.
The revenue growth of FICO was primarily fueled by SaaS software, witnessing a 5% uptick from the previous year, albeit partially offset by a decline in professional services. The company's fiscal year revenue reached $798 million, marking an 8% increase from the preceding year.
FICO's growth strategies revolving around Annual Recurring Revenue (ARR) and Net Revenue Retention (NRR) included adopting a land and expand approach, resulting in an 8% surge in total ARR, with platform ARR experiencing a substantial 31% growth. Noteworthy partnerships were announced with Tata Consulting Services (TCS) and Ison Experience to craft industry-specific solutions leveraging the FICO platform.
Looking towards fiscal '25, FICO provided revenue guidance of approximately $1.98 billion, signaling a robust 15% year-over-year increase. The company also anticipates growth in GAAP net income, GAAP EPS, non-GAAP net income, and non-GAAP EPS. FICO remains confident in the value proposition of their score relative to pricing and intends to persist in investing in software development.
FICO's unwavering focus on reengineering platforms for enhanced scalability and margins, coupled with their strategic partnerships and industry-specific solutions, underscores a steadfast commitment to innovation and expansion. The company's initiatives in financial literacy, capital allocation strategies, and forward-looking outlook position them favorably for sustained success in the ever-evolving business landscape.