On this page of StockholderLetter.com we present the latest annual shareholder letter from FAIR ISAAC CORP — ticker symbol FICO. Reading current and past FICO letters to shareholders can bring important insights into the investment thesis.
FAIR ISAAC CORPORATION
2024 ANNUAL REPORT
Dear Shareholders:
FICO had another exceptional year in fiscal 2024, with record annual revenues and earnings, and our
stock reaching an all-time high. We achieved $1.72 billion in revenues, up 13% versus the prior year.
GAAP net income reached $513 million with $20.45 of diluted earnings per share, up 21% versus the
prior year. We delivered strong annual free cash flow of $607 million* and we continued to return
capital to our shareholders through our share repurchase program, repurchasing 606,000 shares at an
average price of $1,366 per share.
Our fiscal 2024 performance was driven by both our Software and Scores operating segments. In our
Software segment, we continued the momentum with FICO   Platform. The Annual Recurring
Revenue (   ARR   ) for the FICO Platform exceeded 30% year over year growth in each quarter of fiscal
2024. FICO Platform provides the power of analytics and AI to enable smarter business decisions at
scale, powering customer connections across the enterprise. In our Scores segment, the growth we
experienced in fiscal 2024 reflected our leadership and the industry   s ongoing recognition of the
FICO   Score as the standard measure of U.S. consumer credit risk.
Scores
In our Scores segment, revenues were $920 million, up 19% versus last year. Our business-to-business
scores revenue was up 27% for the full year. Our business-to-consumer scores revenue was down 2%
versus last year, primarily due to a decrease in direct sales from the myFICO.com website.
During fiscal 2024, we saw significant adoption of our latest score, FICO   Score 10 T, in
non-government-sponsored enterprise mortgages. We now have clients with over $241 billion in
annualized mortgage originations and approximately $1.33 trillion in eligible mortgage portfolio
servicing that have signed up for FICO Score 10 T. We continue to innovate in scores, having recently
announced the launch of FICO   Score Mortgage Simulator. This new tool can allow mortgage
professionals to run credit event scenarios by applying simulated changes to a current or prospective
applicant   s credit report data to estimate the potential impact on scores based on those actions. This
benefits both mortgage lenders and consumers by potentially enabling lenders to provide more loan
options and more favorable interest rates.
As the industry leader in credit scoring, FICO is committed to improving financial literacy. We do this
in a variety of ways, including by providing free access to FICO   Scores and credit education through
our myFICO.com website and through our FICO   Score Open Access program with over 200 leading
financial institutions. This year our efforts also included partnering again with the Chelsea Football
Club on its American summer tour and teaming up with NASCAR driver Kyle Busch and professional
tennis player Chris Eubanks to host financial education workshops through our Score A Better Future   
(SABF) seminars and our SABF Fundamentals curriculum for students at high schools and colleges in
traditionally underserved communities.
Software
In our Software segment, we delivered $798 million in fiscal 2024 revenue, up 8% versus last year.
Our total Software ARR as of September 30, 2024 was $721 million, an 8% increase over the prior
year. Platform ARR grew 31% versus the prior year, while Non-Platform ARR was flat. This is aligned
with our strategy of focusing our sales team on landing and expanding clients with FICO   Platform. In
Non-Platform, our focus is on maintaining customer satisfaction and upgrading these clients to
Platform over time. An important part of our FICO Platform software strategy is to increase customers   
usage by adopting the Platform for multiple use cases across their business. We measure the success of
this strategy through our dollar-based net retention rate, which was 123% for Platform as of
September 30, 2024.
There continues to be strong demand for FICO   Platform, which is now used by approximately 140
tier one financial institutions to power their customer connections. Several of these customers shared
their success stories with the 1,000+ attendees at our FICO   World conference in April 2024. They
provided compelling examples of how FICO Platform broke down silos to give them more agility and
allowed them to reuse AI models and decision assets across the enterprise to drive better business
outcomes.
We continue to see positive industry recognition for our Software Business. FICO   Platform was
recognized for its innovation in the 2024 IDC MarketScape for Worldwide Decision Intelligence
Platforms. We were ranked again as a top 10 company in the Chartis Research RiskTech100   2025
and were named a Category Leader in both the Chartis Risktech Quadrant   for Enterprise Fraud
Solutions and Chartis RiskTech Quadrant   for Payment Fraud Solutions in 2024. FICO Platform was
also included in the 2024 Gartner   Market Guide for Decision Intelligence Platforms and won the Data
Breakthrough Awards    Business Intelligence Platform of the Year.   
I am excited about our future and confident that we have the right strategies, solutions and teams in
place to continue our success in fiscal 2025. We believe that our Software and Scores businesses are
best-in-class, and that our continued investments will accelerate our competitive advantage. In closing,
I would like to acknowledge the FICO team for its    act like an owner    mindset, including its relentless
focus on customer success, innovation and achieving remarkable results for our business and our
shareholders.
William J. Lansing, CEO

This letter refers to the non-GAAP financial measure free cash flow. For a reconciliation of this non-GAAP financial measure to its most
comparable GAAP measure, please refer to our earnings release for the fourth quarter of fiscal 2024, as filed with the SEC as Exhibit
99.1 to our Current Report on Form 8-K, dated November 6, 2024, and available at www.sec.gov.
 • shareholder letter icon 1/27/2025 Letter Continued (Full PDF)
 • stockholder letter icon 1/25/2023 FICO Stockholder Letter
 • stockholder letter icon 1/10/2024 FICO Stockholder Letter
 • stockholder letter icon More "Business Services & Equipment" Category Stockholder Letters
 • Benford's Law Stocks icon FICO Benford's Law Stock Score = 74


FICO Shareholder/Stockholder Letter Transcript:

FAIR ISAAC CORPORATION
2024 ANNUAL REPORT

Dear Shareholders:
FICO had another exceptional year in fiscal 2024, with record annual revenues and earnings, and our
stock reaching an all-time high. We achieved $1.72 billion in revenues, up 13% versus the prior year.
GAAP net income reached $513 million with $20.45 of diluted earnings per share, up 21% versus the
prior year. We delivered strong annual free cash flow of $607 million* and we continued to return
capital to our shareholders through our share repurchase program, repurchasing 606,000 shares at an
average price of $1,366 per share.
Our fiscal 2024 performance was driven by both our Software and Scores operating segments. In our
Software segment, we continued the momentum with FICO   Platform. The Annual Recurring
Revenue (   ARR   ) for the FICO Platform exceeded 30% year over year growth in each quarter of fiscal
2024. FICO Platform provides the power of analytics and AI to enable smarter business decisions at
scale, powering customer connections across the enterprise. In our Scores segment, the growth we
experienced in fiscal 2024 reflected our leadership and the industry   s ongoing recognition of the
FICO   Score as the standard measure of U.S. consumer credit risk.
Scores
In our Scores segment, revenues were $920 million, up 19% versus last year. Our business-to-business
scores revenue was up 27% for the full year. Our business-to-consumer scores revenue was down 2%
versus last year, primarily due to a decrease in direct sales from the myFICO.com website.
During fiscal 2024, we saw significant adoption of our latest score, FICO   Score 10 T, in
non-government-sponsored enterprise mortgages. We now have clients with over $241 billion in
annualized mortgage originations and approximately $1.33 trillion in eligible mortgage portfolio
servicing that have signed up for FICO Score 10 T. We continue to innovate in scores, having recently
announced the launch of FICO   Score Mortgage Simulator. This new tool can allow mortgage
professionals to run credit event scenarios by applying simulated changes to a current or prospective
applicant   s credit report data to estimate the potential impact on scores based on those actions. This
benefits both mortgage lenders and consumers by potentially enabling lenders to provide more loan
options and more favorable interest rates.
As the industry leader in credit scoring, FICO is committed to improving financial literacy. We do this
in a variety of ways, including by providing free access to FICO   Scores and credit education through
our myFICO.com website and through our FICO   Score Open Access program with over 200 leading
financial institutions. This year our efforts also included partnering again with the Chelsea Football
Club on its American summer tour and teaming up with NASCAR driver Kyle Busch and professional
tennis player Chris Eubanks to host financial education workshops through our Score A Better Future   
(SABF) seminars and our SABF Fundamentals curriculum for students at high schools and colleges in
traditionally underserved communities.
Software
In our Software segment, we delivered $798 million in fiscal 2024 revenue, up 8% versus last year.
Our total Software ARR as of September 30, 2024 was $721 million, an 8% increase over the prior

year. Platform ARR grew 31% versus the prior year, while Non-Platform ARR was flat. This is aligned
with our strategy of focusing our sales team on landing and expanding clients with FICO   Platform. In
Non-Platform, our focus is on maintaining customer satisfaction and upgrading these clients to
Platform over time. An important part of our FICO Platform software strategy is to increase customers   
usage by adopting the Platform for multiple use cases across their business. We measure the success of
this strategy through our dollar-based net retention rate, which was 123% for Platform as of
September 30, 2024.
There continues to be strong demand for FICO   Platform, which is now used by approximately 140
tier one financial institutions to power their customer connections. Several of these customers shared
their success stories with the 1,000+ attendees at our FICO   World conference in April 2024. They
provided compelling examples of how FICO Platform broke down silos to give them more agility and
allowed them to reuse AI models and decision assets across the enterprise to drive better business
outcomes.
We continue to see positive industry recognition for our Software Business. FICO   Platform was
recognized for its innovation in the 2024 IDC MarketScape for Worldwide Decision Intelligence
Platforms. We were ranked again as a top 10 company in the Chartis Research RiskTech100   2025
and were named a Category Leader in both the Chartis Risktech Quadrant   for Enterprise Fraud
Solutions and Chartis RiskTech Quadrant   for Payment Fraud Solutions in 2024. FICO Platform was
also included in the 2024 Gartner   Market Guide for Decision Intelligence Platforms and won the Data
Breakthrough Awards    Business Intelligence Platform of the Year.   
I am excited about our future and confident that we have the right strategies, solutions and teams in
place to continue our success in fiscal 2025. We believe that our Software and Scores businesses are
best-in-class, and that our continued investments will accelerate our competitive advantage. In closing,
I would like to acknowledge the FICO team for its    act like an owner    mindset, including its relentless
focus on customer success, innovation and achieving remarkable results for our business and our
shareholders.
William J. Lansing, CEO

This letter refers to the non-GAAP financial measure free cash flow. For a reconciliation of this non-GAAP financial measure to its most
comparable GAAP measure, please refer to our earnings release for the fourth quarter of fiscal 2024, as filed with the SEC as Exhibit
99.1 to our Current Report on Form 8-K, dated November 6, 2024, and available at www.sec.gov.



shareholder letter icon 1/27/2025 Letter Continued (Full PDF)
 

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