(MENAFNEditorial) SAN JOSE, Calif., April 26, 2018 /PRNewswire/ -- FICO (NYSE: FICO), a leading predictive analytics and decision management software company, today announced results for its second fiscal quarter ended March 31, 2018.
Second Quarter Fiscal 2018 GAAP Results
Net income for the quarter totaled $32.3 million, or $1.03 per share, versus $25.1 million, or $0.78 per share, reported in the prior year period.
Net cash provided by operating activities for the quarter was $49.2 million versus $66.4 million in the prior year period.
Second Quarter Fiscal 2018 Non-GAAP Results
Non-GAAP Net Income for the quarter was $48.1 million vs. $34.0 million in the prior year period. Non-GAAP EPS for the quarter was $1.54 vs. $1.05 in the prior year period.Free cash flow for the quarter was $42.2 million vs. $60.5 million in the prior year period.The Non-GAAP financial measures are described in the financial table captioned "Non-GAAP Results" and are reconciled to the corresponding GAAP results in the financial tables at the end of this release.
Second Quarter Fiscal 2018 GAAP Revenues
The company reported revenues of $257.9 million for the quarter as compared to $228.4 million reported in the prior year period.
"We delivered record revenues in our second quarter, and strong growth in net income and EPS," said Will Lansing, chief executive officer. "We are pleased with our progress and are raising our full-year guidance."
Revenues for the second quarter of fiscal 2018 across each of the company's three operating segments were as follows:
Applications revenues, which include the company's preconfigured decision management applications and associated professional services, were $146.7 million in the second quarter, up 9% from the prior year, primarily due to increased transactional volumes of Originations Solutions and Customer Communication Services. Scores revenues, which include the company's business-to-business (B2B) scoring solutions and associated professional services, as well as business-to-consumer (B2C) service, were $87.9 million in the second quarter, compared to $65.4 million in the prior year quarter, an increase of 34%. B2B revenue increased 47% and B2C revenue increased 13% from the prior year quarter. Decision Management Software revenues, which include Blaze Advisor®, Xpress Optimization and related professional services, were $23.3 million in the second quarter compared to $28.6 million in the prior year quarter, a decrease of 19%, due primarily to decreased up-front license sales. Outlook
The company is updating guidance for fiscal 2018:
Previous Fiscal
2018 Guidance* Updated Fiscal 2018
Guidance*
Revenues $990 million
$1.02 billion
GAAP Net Income $136 million
$140 million
GAAP EPS $4.34
$4.47
Non GAAP Net Income $191 million
$200 million
Non GAAP EPS $6.09
$6.38
* Previous and Updated Fiscal 2018 Guidance includes excess tax benefits associated with stock compensation of $20.0 million, or $0.64 per share, and a full-year tax charge of $17.0 million, or $0.54 per share, associated with tax reform legislation.
The Non-GAAP financial measures are described in the financial table captioned "Reconciliation of Non-GAAP Guidance."
Company to Host Conference Call
The company will host a webcast today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to report its second quarter fiscal 2018 results and provide various strategic and operational updates. The call can be accessed at FICO's web site at www.fico.com/investors . A replay of the webcast will be available at our Past Events page through April 26, 2019.
About FICO
FICO (NYSE: FICO ) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 165 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.
Learn more at http://www.fico.com
Join the conversation at https://twitter.com/fico & http://www.fico.com/en/blogs/
FICO is a registered trademark of Fair Isaac Corporation in the US and other countries.
Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company's Decision Management strategy and reengineering initiative, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to protect such data, the failure to realize the anticipated benefits of any acquisitions, material adverse developments in global economic conditions or in the markets we serve, and other risks described from time to time in FICO's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2017 and subsequent quarterly reports on Form 10-Q. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31,
September 30,
2018
2017
ASSETS:
Current assets:
Cash and cash equivalents $ 107,868
$ 105,618
Accounts receivable, net 188,538
168,586
Prepaid expenses and other current assets 36,813
36,727
Total current assets 333,219
310,931
Marketable securities and investments 27,912
25,515
Property and equipment, net 45,111
40,703
Goodwill and intangible assets, net 831,258
825,599
Other assets 53,395
52,872
$ 1,290,895
$ 1,255,620
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other accrued liabilities $ 55,234
$ 51,614
Accrued compensation and employee benefits 57,294
77,610
Deferred revenue 65,018
55,431
Current maturities on debt 191,000
142,000
Total current liabilities 368,546
326,655
Long-term debt 512,868
462,801
Other liabilities 38,778
39,627
Total liabilities 920,192
829,083
Stockholders' equity 370,703
426,537
$ 1,290,895
$ 1,255,620
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Quarter Ended
Six Months Ended
March 31,
March 31,
2018
2017
2018
2017
Revenues:
Transactional and maintenance $ 195,195
$ 161,249
$ 369,857
$ 314,909
Professional services 46,078
41,284
88,704
84,827
License 16,585
25,845
34,618
48,242
Total revenues 257,858
228,378
493,179
447,978
Operating expenses:
Cost of revenues 78,519
72,131
152,878
142,128
Research & development 32,519
26,663
61,493
52,805
Selling, general and administrative 97,057
86,231
187,353
171,445
Amortization of intangible assets 1,684
3,312
3,472
6,632
Total operating expenses 209,779
188,337
405,196
373,010
Operating income 48,079
40,041
87,983
74,968
Other expense, net (7,277)
(6,905)
(13,224)
(13,177)
Income before income taxes 40,802
33,136
74,759
61,791
Provision for income taxes 8,527
8,052
15,185
(1,194)
Net income $ 32,275
$ 25,084
$ 59,574
$ 62,985
Basic earnings per share: $ 1.08
$ 0.81
$ 1.98
$ 2.03
Diluted earnings per share: $ 1.03
$ 0.78
$ 1.90
$ 1.94
Shares used in computing earnings per share:
Basic 29,985
31,017
30,032
31,003
Diluted 31,300
32,260
31,431
32,398
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
March 31,
2018
2017
Cash flows from operating activities:
Net income $ 59,574
$ 62,985
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 15,095
18,236
Share-based compensation 35,749
29,231
Changes in operating assets and liabilities (38,760)
(11,990)
Other, net 6,352
935
Net cash provided by operating activities 78,010
99,397
Cash flows from investing activities:
Purchases of property and equipment (11,111)
(9,604)
Net activity from marketable securities (2,145)
-
Net cash used in investing activities (13,256)
(9,604)
Cash flows from financing activities:
Proceeds from revolving line of credit 147,000
79,000
Payments on revolving line of credit (48,000)
(24,000)
Proceeds from issuances of common stock 1,706
9,114
Taxes paid related to net share settlement of equity awards (40,448)
(36,914)
Repurchases of common stock (124,715)
(74,647)
Other, net (240)
(1,238)
Net cash used in financing activities (64,697)
(48,685)
Effect of exchange rate changes on cash 2,193
(1,186)
Increase in cash and cash equivalents 2,250
39,922
Cash and cash equivalents, beginning of period 105,618
75,926
Cash and cash equivalents, end of period $ 107,868
$ 115,848
FAIR ISAAC CORPORATION
REVENUE BY SEGMENT
(In thousands)
(Unaudited)
Quarter Ended
Six Months Ended
March 31,
March 31,
2018
2017
2018
2017
Applications revenues:
Transactional and maintenance
$ 97,630
$ 86,013
$ 190,843
$ 170,894
Professional services
38,516
32,640
73,369
66,981
License
10,553
15,684
23,896
31,227
Total applications revenues
$ 146,699
$ 134,337
$ 288,108
$ 269,102
Scores revenues:
Transactional and maintenance
$ 85,644
$ 63,628
$ 155,218
$ 121,880
Professional services
682
994
960
1,515
License
1,584
811
1,647
1,420
Total scores revenues
$ 87,910
$ 65,433
$ 157,825
$ 124,815
Decision Management Software revenues:
Transactional and maintenance
$ 11,921
$ 11,608
$ 23,796
$ 22,135
Professional services
6,880
7,650
14,375
16,331
License
4,448
9,350
9,075
15,595
Total decision management software revenues
$ 23,249
$ 28,608
$ 47,246
$ 54,061
Total revenues:
Transactional and maintenance
$ 195,195
$ 161,249
$ 369,857
$ 314,909
Professional services
46,078
41,284
88,704
84,827
License
16,585
25,845
34,618
48,242
Total revenues
$ 257,858
$ 228,378
$ 493,179
$ 447,978
FAIR ISAAC CORPORATION
NON-GAAP RESULTS
(In thousands, except per share data)
(Unaudited)
Quarter Ended
Six Months Ended
March 31,
March 31,
2018
2017
2018
2017
GAAP net income $ 32,275
$ 25,084
$ 59,574
$ 62,985
Amortization of intangible assets 1,684
3,312
3,472
6,632
Stock-based compensation expense 19,238
14,712
35,748
29,231
Income tax adjustments (5,177)
(5,542)
(9,873)
(10,529)
Excess tax benefit (1,551)
(3,602)
(13,062)
(20,863)
Tax Cuts and Jobs Act 1,665
-
13,420
-
Non-GAAP net income $ 48,134
$ 33,964
$ 89,279
$ 67,456
GAAP diluted earnings per share $ 1.03
$ 0.78
$ 1.90
$ 1.94
Amortization of intangible assets 0.05
0.10
0.11
0.20
Stock-based compensation expense 0.61
0.46
1.14
0.90
Income tax adjustments (0.17)
(0.17)
(0.31)
(0.32)
Excess tax benefit (0.05)
(0.11)
(0.42)
(0.64)
Tax Cuts and Jobs Act 0.05
-
0.43
-
Non-GAAP diluted earnings per share $ 1.54
$ 1.05
$ 2.84
$ 2.08
Free cash flow
Net cash provided by operating activities $ 49,233
$ 66,419
$ 78,010
$ 99,397
Capital expenditures (7,067)
(5,284)
(11,111)
(9,603)
Dividends paid -
(620)
-
(1,238)
Free cash flow $ 42,166
$ 60,515
$ 66,899
$ 88,556
Note: The numbers may not sum to total due to rounding.
About Non-GAAP Financial Measures
To supplement the consolidated GAAP financial statements, the company uses the following non-GAAP financial measures: non-GAAP net income, non-GAAP EPS, and free cash flow. Non-GAAP net income and non-GAAP EPS exclude the impact of amortization expense, share-based compensation expense, restructuring and acquisition-related, excess tax benefit, and adjustment to tax valuation allowance items. Free cash flow excludes capital expenditures and dividends paid. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Management uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of recurring business results including significant non-cash expenses. We believe management and investors benefit from referring to these non-GAAP financial measures in assessing our performance when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitatemanagement's internal comparisons to historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financialmeasures are useful to investors because they allow for greater transparency with respect to key measures used by management in its financial and operating decision-making.
FAIR ISAAC CORPORATION
RECONCILIATION OF NON-GAAP GUIDANCE
(In millions, except per share data)
(Unaudited)
Previous Fiscal 2018 Guidance
Updated Fiscal 2018 Guidance
GAAP net income $ 136
$ 140
Amortization of intangible assets 7
7
Stock-based compensation expense 67
76
Income tax adjustments (16)
(21)
Excess tax benefit (20)
(20)
Tax Cuts and Jobs Act 17
17
Non-GAAP net income $ 191
$ 200
GAAP diluted earnings per share $ 4.34
$ 4.47
Amortization of intangible assets 0.22
0.22
Stock-based compensation expense 2.14
2.44
Income tax adjustments (0.52)
(0.66)
Excess tax benefit (0.64)
(0.64)
Tax Cuts and Jobs Act 0.54
0.54
Non-GAAP diluted earnings per share $ 6.09
$ 6.38
Note: The numbers may not sum to total due to rounding.
About Non-GAAP Financial Measures
To supplement the consolidated GAAP financial statements, the company uses the following non-GAAP financial measures: non-GAAP net income, non-GAAP EPS, andfree cash flow. Non-GAAP net income and non-GAAP EPS exclude the impact of amortization expense, share-based compensation expense, restructuring and acquisition-related, excess tax benefit, and adjustment to tax valuation allowance items. Free cash flow excludes capital expenditures and dividends paid. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Management uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Ourmanagement believes these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of recurring business results including significant non-cash expenses. We believe management and investors benefit from referring to thesenon-GAAP financial measures in assessing our performance when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitatemanagement's internal comparisons to historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financialmeasures are useful to investors because they allow for greater transparency with respect to key measures used by management in its financial and operating decision-making.
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SOURCE FICO
Related Links
http://www.fico.com
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