Fair Isaac Corporation (NYSE:FICO) Reports Better-than-expected Fourth-quarter 2025 Revenue

Credit scoring and analytics company FICO (NYSE:FICO) exceeded Wall Street’s fourth-quarter 2025 revenue expectations, with revenue up 16.4% year over year to $512 million. On the other hand, the company’s full-year revenue guidance of $2.35 billion was 3.7% halfway below analyst estimates. Non-GAAP earnings of $7.33 per share were 3.5% above analyst consensus estimates.

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Gain: $512 million vs. analyst estimates of $502.7 million (16.4% YoY growth, 1.8% better)
Custom EPS: $7.33 vs. analyst estimates of $7.08 (3.5% better)
Adjusted EBITDA: $282.3 million vs. analyst estimates of $270 million (55.1% margin, 4.6% better)
The company reaffirmed its full-year revenue expectations of $2.35 billion at the center
Operating margin: 45.7%, compared to 40.8% in the same quarter last year
Free cash flow margin: 32.3%, compared to 42.5% in the same quarter last year
Market capitalization: $36.72 billion

Fair Isaac Corporation (NYSE:FICO), the maker of the three-digit number that can determine whether you get a mortgage or credit card, develops analytics software and the widely used FICO Score, the standard measure of consumer credit risk in the United States.

Assessing a company’s long-term sales performance reveals insights into its quality. Any company can perform well for a quarter or two, but many sustainable companies grow for years.

With revenues of $2.06 billion in the last twelve months, Fair Isaac Corporation is a mid-sized business services company, which sometimes comes with disadvantages compared to larger competitors that benefit from better economies of scale. The positive is that the company can still maintain high growth rates because it operates from a smaller revenue base.

As you can see below, Fair Isaac Corporation’s revenue grew at an impressive compound annual growth rate of 9.5% over the past five years. This is a good starting point for our analysis because it shows that Fair Isaac Corporation’s demand exceeded that of many business service providers.

Quarterly sales of Fair Isaac Corporation

Long-term growth is the most important thing, but within business services, a half-decade historical view can ignore new innovations or demand cycles. Fair Isaac Corporation’s annualized revenue growth of 15.3% over the past two years is above the five-year trend, indicating that demand has been strong and has increased recently.

Fair Isaac Corporation year-on-year revenue growth

This quarter, Fair Isaac Corporation reported year-over-year revenue growth of 16.4%, and revenue of $512 million exceeded Wall Street estimates by 1.8%.

Looking ahead, sell-side analysts expect revenue to grow by 24.6% over the next twelve months, an improvement on the past two years. This projection is eye-popping and implies that the newer products and services will lead to better revenue performance.

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Fair Isaac Corporation has been a well-oiled machine for the past five years. It demonstrated elite profitability for a business services company, with an average operating margin of 43%.

Looking at the profitability trend, Fair Isaac Corporation’s operating margin increased by 7.8 percentage points over the past five years as sales growth gave it tremendous operating leverage.

Fair Isaac Corporation shows 12-month operating margin (GAAP)

This quarter, Fair Isaac Corporation generated an operating margin profit of 45.7%, an increase of 4.9 percentage points year over year. This increase was a welcome development and shows that it was more efficient.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth. For example, a company might boost its revenue by spending excessively on advertising and promotions.

Fair Isaac Corporation’s earnings per share grew at an astonishing 24% annual rate over the past five years, higher than its 9.5% annualized revenue growth rate. This tells us that the company became more profitable per share as it grew.

Fair Isaac Corporation trails twelve-month earnings per share (non-GAAP)

We can dig deeper into Fair Isaac Corporation’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Fair Isaac Corporation’s operating margin has increased by 7.8 percentage points over the past five years. In addition, the number of shares shrank by 19.6%. These are positive signals for shareholders, as improving profitability and share buybacks boost earnings per share growth relative to revenue growth.

Fair Isaac Corporation outstanding diluted shares

As with revenue, we analyze earnings per share over a shorter period of time to see if we’re missing a change in the business.

For Fair Isaac Corporation, the two-year annual EPS growth of 24.6% is similar to the five-year trend, indicating strong and stable earnings power.

In the fourth quarter, Fair Isaac Corporation reported adjusted earnings per share of $7.33, compared to $5.79 in the same quarter last year. This print beat analyst estimates by 3.5%. Wall Street expects Fair Isaac Corporation’s full-year earnings per share of $31.45 to grow 41.5% over the next twelve months.

It was encouraging to see that Fair Isaac Corporation exceeded analyst revenue expectations this quarter. We were also pleased that earnings per share outperformed Wall Street estimates. On the other hand, revenue expectations for the entire year missed. Overall, this quarter could have been better. The stock rose 1.8% to $1,553 immediately after the results.

So should you invest in Fair Isaac Corporation now? We think the latest quarter is just one piece of the longer-term business quality puzzle. Quality, in combination with valuation, can help determine whether the stock is a buy. We cover that in our useful full research report which you can read here. It’s free.