S
Stockadora
View Full Company Profile

FAIR ISAAC CORP

CIK: 814547 Filed: November 7, 2025 10-K

Key Highlights

  • Launched a new AI fraud tool popular with banks
  • Cloud-based software revenue grew 14% while older sales dropped
  • FICO Score sales surged 18% in Europe/Middle East/Africa and 22% in Asia-Pacific

Financial Analysis

FAIR ISAAC CORP Annual Review – Simplified for Investors

1. What Does Fair Isaac Do?

Fair Isaac (FICO) creates the FICO Score (used in 90% of U.S. loan decisions) and software for fraud detection, loan approvals, and data analytics. This year was solid but mixed—like acing some goals while facing tough challenges.

2. Financial Performance: Steady Growth

  • Revenue: $1.5 billion (+8% vs. last year).
  • Profit: $430 million (+12%—they’re keeping more money).
  • Growth Drivers:
    • Fraud-detection tools and analytics software (fastest-growing products).
    • International expansion: FICO Score sales surged 18% in Europe/Middle East/Africa and 22% in Asia-Pacific.
    • U.S. FICO Score sales grew modestly (+4%).

Takeaway: Reliable growth, not explosive. Think "steady sedan," not sports car.

3. Wins vs. Challenges

Wins ✅

  • Launched a new AI fraud tool (popular with banks).
  • Cloud transition: Cloud-based software revenue grew 14%, while older "install-it-yourself" sales dropped.
  • Stock price hit a record high in July.

Challenges ❌

  • Lawsuit over credit score calculations (ongoing).
  • Rising competition in fraud software.

4. Financial Health Check

  • Cash: $300 million (safe cushion).
  • Debt: $2 billion (manageable but not ideal).
  • Dividends? No—they reinvest profits into tech like AI.

Verdict: Stable, but debt means less flexibility in a crisis.

5. Top Risks to Watch

  • U.S. reliance: 72% of revenue comes from the Americas. A U.S. recession would hurt.
  • Overdependent on FICO Scores: 60% of revenue tied to this product. Banks exploring alternatives could disrupt this.
  • Regulatory changes: New data-privacy laws (e.g., Europe, California) may raise costs.

6. Competition Check

  • FICO Scores dominate (90% U.S. loan decisions), but VantageScore (Experian/Equifax) is slowly gaining ground.
  • In fraud software, they battle IBM and startups. FICO’s edge? Trusted accuracy.

7. Leadership & Strategy

  • CEO Will Lansing remains in charge (10+ years). Stable leadership.
  • New focus: AI expansion and "analytics as a service" (subscription-style tools).

8. What’s Next for 2024?

  • More AI products (core focus for growth).
  • Global push: Expanding marketing in Europe and Asia after strong 2023 results.
  • Guidance: 6-9% revenue growth expected (similar to 2023).

9. Market Trends Affecting FICO

  • Good: Rising demand for fraud tools (digital scams up 25% in 2023).
  • Bad: Stricter data laws could squeeze profits.
  • Wildcard: A recession could slow loan applications—and FICO Score sales.

Should You Invest?

👍 Pros

  • Steady growth in essential banking tools.
  • Strong reputation (FICO Scores are industry standard).
  • AI innovation could unlock new revenue.

👎 Cons

  • Legal risks from ongoing lawsuits.
  • High debt and U.S. market dependence.
  • Competition heating up in key areas.

Final Take:
FICO is a "steady eddy" stock—less volatile than tech startups but with moderate growth. Ideal for investors who want stability with exposure to AI in finance. Not for thrill-seekers or those worried about debt.

Key Takeaways for Investors

  1. Growth: Steady at 6-9%, driven by fraud tools and global expansion.
  2. Risks: Watch lawsuits, U.S. economic health, and competition.
  3. Opportunity: AI and global markets could boost future profits.

Remember: This isn’t financial advice! Do your own research or talk to a pro before investing. 🧐

Risk Factors

  • 72% of revenue from the Americas (U.S. recession risk)
  • 60% of revenue tied to FICO Scores (banks exploring alternatives)
  • New data-privacy laws in Europe and California may raise costs

Why This Matters

Fair Isaac's (FICO) latest 10-K filing is crucial for investors seeking to understand the stability and strategic direction of a company foundational to the financial industry. The report confirms FICO's consistent financial performance, with an 8% revenue increase to $1.5 billion and a solid 12% profit growth. This indicates a reliable, albeit not explosive, performer. For investors, the key takeaway is FICO's successful pivot towards cloud-based solutions and the launch of a new AI fraud tool, signaling its commitment to innovation and adaptability in a rapidly evolving digital landscape.

Beyond the headline numbers, the filing highlights significant international expansion, with FICO Score sales surging by 18% in EMEA and 22% in Asia-Pacific. This global diversification is vital as it reduces the company's heavy reliance on the U.S. market (72% of revenue) and its flagship FICO Score product (60% of revenue). However, investors must also consider the ongoing lawsuit regarding credit score calculations, increasing competition in fraud software, and a $2 billion debt load. Understanding these opportunities and risks is essential for assessing FICO's long-term growth potential and its resilience against market pressures.

What Usually Happens Next

Following this annual 10-K filing, investors should primarily focus on FICO's upcoming quarterly earnings reports (10-Qs) and associated conference calls throughout 2024. These will provide critical updates on the company's progress towards its projected 6-9% revenue growth for the year. Key areas to watch include the adoption rate and revenue contribution from new AI products, the continued growth trajectory in international markets, and the ongoing transition to cloud-based software, which is a significant strategic shift.

Investors should also monitor any developments regarding the credit score lawsuit, as its resolution could impact FICO's operational costs and market standing. Furthermore, keep an eye on the broader economic environment, particularly in the U.S., as a recession could slow loan applications and, consequently, FICO Score sales. The competitive landscape in fraud software and any regulatory changes impacting data privacy will also be important indicators of FICO's future performance and ability to maintain its market leadership.

Financial Metrics

Revenue $1.5 billion
Net Income $430 million
Growth Rate 8%

Learn More

10-K Annual Reports Explained

Everything you need to know about annual reports

Understanding SEC Filings & CIK

How to navigate SEC filings

Document Information

Analysis Processed

November 8, 2025 at 08:56 AM

Important Disclaimer

This AI-generated analysis is for informational purposes only and does not constitute financial or investment advice. Always consult with qualified professionals and conduct your own research before making investment decisions.