Business Overview / Sources of Revenue

Fair Isaac Corporation (ticker FICO) is a data analytics company based in Bozeman, Montana, specializing in credit scoring services[4]. Founded in 1956[3][4], FICO provides analytics software products primarily to clients in the financial sector[5].

The company's core business involves developing software that helps businesses monitor credit risk, fight fraud, manage customer relationships, and comply with government regulations[5]. FICO is most known for creating the FICO® Score, a standardized measure of consumer credit risk used throughout the United States[4][5].

Other flagship products include Falcon for credit card fraud detection and Triad for customer management[5]. FICO serves businesses across 80+ countries[2], helping them make better operational decisions that drive growth, profitability, and customer satisfaction[1][2].

As of the latest available information, FICO has trailing 12-month revenues of $828 million and employs over 2,700 people worldwide[5].

Revenue Growth Potential and Recurrence

Fair Isaac (FICO) demonstrates a significant recurring revenue component, with Software Annual Recurring Revenue (ARR) reaching $729.3 million as of December 31, 2024[3]. This represented a 6% year-over-year growth, with platform ARR growing at an impressive 20%[2]. The company's platform-based products continue to gain traction, having represented 26% of total software ARR in 2023[4].

Revenue growth has been robust, with total revenue increasing 14.72% year-over-year to $1.84 billion in the twelve months ending March 31, 2025[5]. The most recent quarter showed 14.97% growth to $498.74 million[5].

Given the strong performance in platform software (112% Dollar-Based Net Retention Rate)[2] and the continued shift toward recurring revenue models, FICO appears well-positioned for sustainable growth in the 10-15% range annually over the next 5+ years, particularly as their platform strategy continues to drive higher-margin recurring revenue.

Economic Moat Factors

Fair Isaac Corporation (FICO) possesses a wide economic moat primarily driven by strong network effects in its credit scoring business[1][2]. The FICO Score has become the standard in the credit industry, with increased usage by financial institutions and lenders enhancing its value and reinforcing FICO's dominance[2][4]. This creates substantial switching costs for the financial industry.

The company's competitive advantages stem from its strong brand reputation and proprietary credit scoring algorithms that are widely adopted by financial institutions[2]. These intangible assets create significant barriers to entry for competitors.

FICO's business model demonstrates high scalability, as evidenced by its increasing Return on Invested Capital (ROIC) while maintaining relatively flat invested capital[4]. This scalability, combined with gross margins approaching 80%, further strengthens its economic moat[4].

Despite recent regulatory scrutiny that has impacted its stock price[5], FICO's foundational role in the credit scoring ecosystem remains strong and difficult to displace.

Leadership

The CEO of Fair Isaac Corporation (FICO) is William (Will) Lansing, who has held the role since January 2012 and is not a founder[3][4][5]. Lansing has an extensive executive background, previously serving as CEO at Infospace, ValueVision Media, NBC Internet, and Fingerhut, among others[3][4]. Specific details about his ownership stake are not provided in the available sources. The broader leadership team includes Braden R. Kelly as Chairman, Steve Weber as CFO, and several other experienced executives and board members[1][4].

Financial Health

Based on available information, Fair Isaac Corporation (FICO) appears financially strong, demonstrating solid earnings growth with Q1 fiscal 2025 EPS reaching $6.14, up from $4.80 year-over-year[4]. For Q2 fiscal 2025, the company reported earnings of $6.59 per share[2], slightly below analyst expectations of $7.39[3]. FICO projects fiscal 2025 revenues of $1.98 billion with GAAP EPS of $25.05[4].

However, the search results don't provide specific data on cash-to-debt ratio, free cash flow metrics, or share repurchase activities, making it impossible to assess these aspects of FICO's financial health. The company's consistent earnings growth suggests operational strength, but a complete financial health assessment requires additional balance sheet and cash flow information.

Last updated Jun 9, 2025