FICO
Fair Isaac Corporation
Technology · Software - Application · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Near-perfect scores in profitability and momentum, anchored by a 46.5% operating margin and a sharp 2026Q2 revenue surge to $691.7 million, drove the bulk of the composite score.
- Strong growth metrics — 15.9% revenue growth and 29.8% EPS expansion in FY2025 — added further support, reflecting broad-based fundamental strength.
- The composite score of 70.6/100 and a Low risk rating together support the Core Holding Candidate label, reflecting a company with durable earnings power but not without balance sheet and thematic limitations.
Why Not Higher
- The financial health factor was constrained by a debt-to-equity ratio of -1.75, indicating significant leverage that tempers an otherwise exceptional fundamental profile.
- The absence of any macro theme assignment means FICO received zero thematic tailwind points, leaving 20 potential points entirely uncaptured in the model.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024 to FY2025 by 15.9%, net income rose 27.1% over the same period, and diluted EPS expanded 29.8% from FY2024 to FY2025.
The model rewarded FICO's broad-based acceleration across the top and bottom line, with earnings growth meaningfully outpacing revenue growth, signaling improving operating leverage.
In FY2025, FICO posted a net margin of 32.7%, an operating margin of 46.5%, and a return on assets of 34.9%.
These figures reflect exceptional capital efficiency and pricing power; the model awarded a perfect score in recognition of margins and asset returns that are well above typical software-sector benchmarks.
Filing evidence currently available does not support a more specific explanation for this factor.
Over the last four reported quarters, revenue moved from 2025Q3's $536,415,000 and 2025Q4's $515,751,000 through 2026Q1's $511,959,000 before surging to $691,677,000 in 2026Q2; net income followed a similar pattern, rising from $181,789,000 in 2025Q3 and $155,014,000 in 2025Q4 through $158,373,000 in 2026Q1 to $264,458,000 in 2026Q2, with operating income likewise accelerating from $262,518,000 in 2025Q3 to $402,465,000 in 2026Q2.
The data show a pronounced step-up in 2026Q2 across all three metrics after a relatively flat stretch in the prior three quarters, a pattern of late-period acceleration that the model rewarded with a near-peak momentum score.
The company has an established history of paying dividends, though a current figure is not available within our filing-freshness window.
The model assigned a mid-range score reflecting that a dividend program exists but cannot be evaluated on current yield or payout metrics given the absence of a fresh, citable figure.
FICO is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment means no thematic tailwind contributed to the score; this reflects the model's current classification state and is not itself a positive or negative signal about the company's business.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
FICO delivered strong broad-based growth in FY2025, with revenue rising 15.9% and net income climbing 27.1%, while diluted EPS expanded 29.8%, demonstrating meaningful operating leverage. Profitability metrics are exceptional, with a net margin of 32.7%, an operating margin of 46.5%, and a return on assets of 34.9%, all well above typical software-sector benchmarks. Momentum accelerated sharply in the most recent quarter, with 2026Q2 revenue surging to $691.7 million and operating income reaching $402.5 million after a relatively flat prior three quarters. The composite model score of 70.6/100 reflects these strengths, tempered by a below-average financial health score and the absence of a thematic tailwind assignment.
Plain English
FICO is a highly profitable software company that grew its earnings nearly 30% last year and just posted its biggest revenue quarter in recent memory, though it carries notable debt and doesn't currently benefit from any of the model's tracked macro themes.
Bull Case vs. Bear Case
Bull Case
- Earnings growth of 27.1% in net income and 29.8% in diluted EPS outpaced revenue growth of 15.9%, signaling that FICO is converting each additional revenue dollar into profit at an improving rate.
- With an operating margin of 46.5% and a return on assets of 34.9% in FY2025, FICO demonstrates exceptional capital efficiency and pricing power that are well above typical software-sector peers.
- The pronounced step-up in 2026Q2 — revenue of $691.7 million and operating income of $402.5 million — after three relatively flat quarters suggests late-cycle acceleration that could carry forward.
Bear Case
- The financial health factor received a below-average score, and the debt-to-equity ratio of -1.75 in FY2025 signals a heavily leveraged balance sheet that could constrain flexibility in adverse conditions.
- FICO is not assigned to any of the model's 24 tracked macro themes, meaning no thematic tailwind is contributing to its score and the company may be less positioned to benefit from current macro-driven investment flows.
- The dividend factor received only a mid-range score because current yield and payout metrics cannot be evaluated within the filing-freshness window, leaving income-oriented investors without a clear picture of shareholder return.
What Could Change the Picture
Bullish Triggers
- If the 2026Q2 revenue and operating income surge proves to be the start of a sustained acceleration rather than a one-quarter spike, the momentum case would strengthen considerably.
- A reduction in leverage or improvement in balance sheet metrics could lift the financial health score and remove one of the primary drags on the composite rating.
Bearish Triggers
- If revenue growth decelerates from the 15.9% FY2025 pace or the 2026Q2 surge reverses in subsequent quarters, the high-margin story would face scrutiny given the elevated debt load.
- Any deterioration in operating margins from the current 46.5% level would signal that pricing power or cost discipline is weakening, undermining the core profitability thesis.
Risk Profile
Low RiskThe primary financial risk stems from FICO's heavily leveraged balance sheet, reflected in a debt-to-equity ratio of -1.75 in FY2025, which could limit strategic flexibility if business conditions deteriorate. On the positive side, the sharp momentum acceleration in 2026Q2 — with operating income reaching $402.5 million — suggests near-term earnings resilience that partially offsets balance sheet concerns.
Key Catalysts to Watch
The pronounced revenue and operating income surge in 2026Q2, reaching $691.7 million and $402.5 million respectively after three flat quarters, represents a potential inflection point that could sustain elevated momentum scores in future periods.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.