Fair Isaac’s Core Credit Scoring Business Drives Strong Quarterly Beat

Fair Isaac Corporation, the analytics software firm behind the widely used FICO score, delivered first-quarter fiscal 2026 results that comfortably surpassed Wall Street's forecasts. The standout performance was powered by its essential credit scoring division, which posted double-digit growth. However, investor enthusiasm was tempered, with shares dipping slightly in after-hours trading despite the robust operational figures.

For the quarter, the company reported revenue of $512 million, a 16% year-over-year increase. Adjusted earnings per share (EPS) came in at $7.33, notably higher than the consensus estimate of $7.07. Adjusted net profit rose 22% to $176 million.

Despite this earnings beat, the stock reacted with caution, declining approximately 1.2% after the market closed. Analysts attributed the muted response to management reaffirming, rather than raising, its full-year fiscal 2026 guidance. The company continues to project annual revenue of $2.35 billion and adjusted EPS of $38.17.

Segment Performance: A Tale of Two Divisions

The company's results revealed a clear divergence between its two main business units.

Should investors sell immediately? Or is it worth buying Fair Isaac?

Scores Segment Shines: The core Scores business was the primary growth engine, with revenue surging 29% to $305 million. The business-to-business (B2B) division within this segment was particularly strong, recording a 36% revenue jump. This growth was driven by a combination of price adjustments and higher volumes of mortgage-related score inquiries. The business-to-consumer (B2C) arm saw more moderate growth of 5%.

Software Platforms Show Strategic Shift: Total Software segment revenue grew a modest 2% to $207 million. Beneath this headline figure, a key metric signaled positive momentum: Annual Recurring Revenue (ARR) for the software platform expanded by a substantial 33%. This significant ARR growth indicates a successful ongoing transition toward more predictable, subscription-based revenue models.

Capital Allocation and Future Catalysts

Fair Isaac maintained its commitment to returning capital to shareholders, repurchasing 95,000 of its own shares at an average price of $1,707 during the quarter. The company generated free cash flow of $165 million in the reporting period.

Investors are now looking ahead to the upcoming "FICO World 2026" conference, scheduled for May 19-22 in Orlando. The event is anticipated to provide deeper insights into the company's strategic roadmap and technological advancements, potentially serving as the next catalyst for the stock.