Fair Isaac NYSE: FICO reported a sharp rise in second-quarter fiscal 2026 results and raised its full-year outlook, with management highlighting strength in mortgage-related score revenues, continued expansion in its FICO Platform business, and ongoing preparation for the rollout of FICO Score 10T in the conforming mortgage market.
Quarterly results and capital returns
CEO Will Lansing said the company delivered “a very strong quarter and a great start to the H1 of our fiscal year,” prompting an increase to fiscal 2026 guidance.
FICO reported second-quarter revenue of $692 million, up 39% year over year. GAAP net income was $264 million, up 63%, and GAAP earnings were $11.14 per share, up 69%. On a non-GAAP basis, net income was $297 million, up 54%, and earnings were $12.50 per share, up 60%.
Lansing said free cash flow was $214 million in the quarter and $867 million over the last four quarters, representing a 28% increase over the prior four-quarter period. He also pointed to significant share repurchase activity, with the company buying back $605 million of stock, or 484,000 shares, at an average price of $1,251 per share. CFO Steve Weber called it “the single largest quarterly repurchase in dollars in FICO history.”
Weber added that since April 1, the company has repurchased an additional $170 million (about 164,000 shares) at an average price of $1,040, supported by a $1.5 billion board authorization, free cash flow, and unused revolving credit capacity.
Scores segment buoyed by mortgage originations
Scores segment revenue rose to $475 million, up 60% year over year, according to management. Lansing said B2B Scores were the “key driver of growth,” and he noted a sixth consecutive quarter of growth in B2C Scores.
Weber said B2B revenue increased 72%, driven primarily by higher unit pricing for mortgage origination scores and higher mortgage origination volumes. B2C revenue rose 5%, “driven mainly by our indirect channel partners,” he said.
A major contributor was mortgage originations revenue, which Weber said rose 127% year over year and represented 72% of B2B Scores revenue and 63% of total Scores revenue. Auto originations revenue increased 13%, while credit card, personal loan, and other originations revenue rose 6%.
Asked about the mortgage growth, Lansing said volumes were “decent” and benefited from a period when interest rates dipped. He said the quarter was “probably better than we expected when we gave our guidance,” while emphasizing the company’s conservative approach to volume assumptions. Weber added that some customers who had been on “a little bit lighter rate last year” moved “up to the full rack rate this quarter,” alongside higher volumes.
FICO Score 10T pricing shift and Direct License Program progress
Management spent much of the Q&A discussing credit score modernization and the company’s pricing updates for FICO Score 10T. Lansing said FICO supports the FHFA and FHA initiative to bring FICO Score 10T to market “in the coming months,” describing it as “the most predictive credit score for all borrowers, including first-time home borrowers.” He also said 10T incorporates rental and utility payment history, which “enabl[es] more consumers to qualify for mortgages.”
To encourage adoption, FICO adjusted performance model pricing in the FICO Mortgage Direct License Program from $4.95 per score plus a $33 funding fee to $0.99 per score plus a $65 funding fee. Lansing told analysts the move is part of a broader shift the company has discussed for years—moving away from charging primarily “upfront first score” and instead distributing monetization “over more players across the chain.” He said the new pricing is designed to “encourage wide use of Ten T.”
On competition, Lansing said FICO believes it is competitive on both predictiveness and price, noting that 10T at $0.99 is “at parity with Vantage at $0.99.” He said FICO does not “see good reasons to switch,” though he acknowledged that how FHFA addresses potential “gaming” could influence outcomes. In scenarios where consumers shop for the best rate and the system can be gamed, he said FICO’s analysis suggests originators and lenders could end up pulling both scores.
Regarding implementation timing, Lansing said the Direct License Program has “a few pieces” that are “mostly in place,” but the company is still working through final details. He said three of the top five resellers are signed and FICO is in “deep discussion” with the other two, adding that he expects all five major resellers will be able to provide the Direct License Program. A key remaining dependency is FHFA’s “final sign-off” allowing resellers to calculate the score, which Lansing said he does not expect to be an issue, though he did not provide a go-live date.
Lansing also said FICO added 11 lenders to its FICO Score 10T early adopter program during the quarter, bringing the program to 55 lenders. He said those lenders account for more than $495 billion in annual serviceable originations (based on 2025 HMDA data) and more than $1.6 trillion in eligible servicing. In response to another question, Lansing said 10T has been run in the non-conforming market in parallel with Classic and cited an “latest number” of about $1.2 trillion underwritten.
Software: Platform momentum and migrations
FICO’s Software segment generated $217 million in second-quarter revenue, up 7% year over year. Lansing said results included 54% growth in platform revenue and a 12% decline in non-platform revenue.
Weber reported Software ACV bookings of $28 million in the quarter, with trailing-twelve-month ACV bookings reaching $126 million, up 36% from the same period last year. He said the company expects second-half bookings to exceed the first half, citing a “strong pipeline.”
Total Software ARR was $789 million, up 10% year over year. Platform ARR reached $349 million (about 44% of total ARR) and grew 49%, while non-platform ARR declined 8% to $440 million. Weber said Platform ARR growth reflected new customer wins and expansion of use cases and volumes, and it also included migrations from non-platform offerings; excluding those migrations, he said platform ARR growth was in the “mid-30% range.”
Dollar-based net retention was 109%, with Platform NRR at 136% and non-platform NRR at 90%. Weber said platform NRR was driven by new use cases and increased usage of existing use cases.
Lansing emphasized that Platform growth has largely been driven by financial services customers and the company’s “land and expand strategy,” where a financial institution adopts the platform and then expands to additional use cases as it sees the benefits.
Margins, expenses, and updated full-year guidance
Weber said operating expenses were $289 million, up 4% sequentially, driven by personnel costs. He expects operating expenses to “trend modestly upward” from the second-quarter run rate in the back half of the year due to personnel expenses and marketing tied to FICO World and the Scores business.
Non-GAAP operating margin was 65%, up from 58% a year ago, representing 712 basis points of year-over-year margin expansion. The effective tax rate was 25.7%; Weber said the company expects a full-year operating tax rate of 25% to 26% and an effective tax rate around 24%.
At quarter-end, FICO had $272 million in cash and marketable investments and total debt of $3.64 billion at a weighted-average interest rate of 5.5%. Weber noted the company issued $1 billion of senior notes due 2034 in March and used some proceeds to redeem $400 million of notes due in May. The company also had a $265 million revolver balance, repayable at any time, and Weber said interest expense dollars are expected to trend modestly upward in the back half of the fiscal year.
For fiscal 2026, Lansing said FICO now expects revenue of $2.45 billion, up 23% from the prior year. GAAP net income guidance is $825 million with GAAP EPS of $35.60, increases of 27% and 34%, respectively. Non-GAAP net income guidance is $946 million with non-GAAP EPS of $40.45, up 29% and 35%, respectively.
In the Q&A, Lansing said guidance assumes “no loss of volume to VantageScore in this fiscal year,” and Weber added that the outlook includes an assumption that the performance model will go live with some revenue lag that could shift revenue from late fiscal 2026 into early fiscal 2027 due to the timing of funding fees.
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.
Featured Stories
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Fair Isaac, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Fair Isaac wasn't on the list.
While Fair Isaac currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Nuclear energy is entering a new growth cycle as rising power demand, expanding data centers, and renewed policy support bring the sector back into focus. After strong gains in recent years, the most impactful phase of nuclear investment may still be ahead.
This report highlights seven nuclear energy stocks positioned across the value chain—combining near-term revenue with long-term upside as next-generation technologies scale. Click the link below to unlock the full list.
Get This Free Report
