Fair Isaac Corporation

Steve Weber. Today we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison to the prior quarter to facilitate an understanding of the run rate of the business. Certain statements made in this presentation are forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many risks and uncertainties that could cause actual results to differ materially. Information concerning these risks and uncertainties is contained in the company's filings with the SEC, particularly in the risk factors and forward-looking statements portions of such filings. Copies are available from the SEC, from the FICA website, or from our investment relations team. This call will also include statements regarding certain non-GAAP financial measures. Please refer to the company's earnings release and Regulation G schedule issued today for reconciliation of each of these non-GAAP financial measures to the most comparable GAAP measure. The earnings release and Regulation G schedule are available on the investor relations page of the company's website at FICO.com or on the SEC's website at SEC.gov. A replay of this webcast will be available through January 28, 2027. We have refreshed our quarterly investor presentation with additional content, which is available in the investor relations section of our website. We will refer to this presentation during today's earnings announcement. I will now turn the call over to our CEO, Will Lansing.

Thanks, Dave, and thank you everyone for joining us for our first quarter earnings call. We had another strong quarter and are reiterating our fiscal 2026 guidance. We reported Q1 revenues of $512 million, up 16% over last year, as you can see on page 5 of our investor presentation. For the quarter, we reported $158 million in gap net income in the quarter, up 4%, and gap earnings of $6.61 per share, up 8% from the prior year. We reported $176 million in non-gap net income, up 22%. and non-GAAP earnings of $7.33 per share, up 27% from the prior year. We delivered free cash flow of $165 million in our first quarter. Over the last four quarters, we delivered $718 million in free cash flow, an increase of 7% year over year. We continue to return capital to our shareholders through buybacks by repurchasing 95,000 shares, in Q1 at an average price of $1,707 per share. At the segment level on page six, you can see our first quarter scores segment revenues were 305 million. That's up 29% versus the prior year. While B2B scores were the key driver of growth, we also saw continued growth in B2C scores. In our software segment, we delivered 207 million in Q1 revenues. That's up 2% over last year. Results included 37% platform revenue growth and a 13% decline in non-platform revenue. Steve will provide additional revenue details later in the call. We had another strong execution quarter in our scores business, which we highlight on page 8. The FICO Mortgage Direct Licensing Program allows resellers the ability to streamline score access, enhance price transparency, and provide cost savings to lenders through reduced breakage fees. This quarter, we announced the addition of four new strategic reseller participants to the FICO Mortgage Direct Licensing Program, Zactus, Cotality, Ascend Companies, and CIC Credit. Additionally, we signed a DLP agreement to add another participant, Meridian Link, a key platform provider to the mortgage industry. We'll be releasing a press release on that soon. With strong demand from lenders, FICO is actively working alongside participants to support testing. One large reseller is close to completing production integration testing. Another large reseller has completed that testing and is now testing system integration downstream. While we expect to go live soon with multiple partners, we also continue to work on finalizing agreements with additional reseller participants. The direct license program currently supports classic FICO. While the conforming market is anticipating the general availability of FICO Score 10-T, we expect FICO Score 10-T to be available for direct licensing in both conforming and non-conforming in the first half of calendar 26. A high-level overview of the direct license program and FICO Score 10-T can be found on page 9 and 10 of our presentation. FICO Score 10-T is a meaningful step forward in credit risk assessment. FICO Score 10-T offers significant improvements in predictive accuracy. combined with a focus on fairness and model stability, offering tremendous benefits for lenders, investors, and borrowers, compared to other alternatives on the market. In the last year, we have nearly doubled the number of lenders in our FICO Score 10-T Adopter Program. These lenders account for more than $377 billion in annual originations and more than $1.6 trillion in eligible servicing volume, most making multi-year commitments to use the FICO Score for mortgage decisions in both the conforming and non-conforming markets. This quarter, we also announced a strategic partnership with Plaid to deliver the next generation of Ultra FICO Score. This score combines the proven reliability of the FICO Score with real-time cash flow data from Plaid to provide lenders with a single enhanced credit score that delivers superior consumer risk assessment without operational complexity. The enhanced Ultra FICO Score solution is credit bureau agnostic and will leverage cash flow data historical and current information about the money flowing into and out of a consumer's transaction accounts. That's checking, savings, money market, accessed through Plaid's open finance network of consumer permission data. Plaid powers nearly 1 million secure financial connections each day and has helped more than half of Americans with a bank account securely move more of their financial life online. We see growing demand for this score, which will launch for distribution with Plaid in the first half of calendar 2026. Within the quarter, we continued to expand adoption of FICO Score Mortgage Simulator by partnering with Sharper Lending Solutions, Credit Interlink, and Ascend Partners. Including Zactus and Meridian Link, announced in fiscal 2025, five resellers have adopted the simulator, and we're expecting another large reseller to sign shortly. The FICO Score Mortgage Simulator is the only simulation tool available to mortgage professionals that use the FICO Score algorithm. It enables mortgage professionals to run credit event scenarios by applying mock changes in an applicant's credit report data to simulate potential changes to the applicant's FICO score. The FICO score mortgage simulator supports simulations on all three credit bureaus and models potential changes to several FICO score versions used in mortgage lending. Mortgage professionals can leverage valuable insight from the simulator to help drive smarter decisions that can present more loan options and favorable interest rates for customers. In our software business, we're thrilled to be recognized by Gartner as a leader in the January 2026 Gartner Magic Quadrant for Decision Intelligence Platforms. We are positioned the highest for our ability to execute. We believe this recognition is a landmark moment for FICO. Further, we feel it reflects our commitments to empowering customers and delivering lasting impact worldwide. As a market leader in decision intelligence, FICO enables businesses to make real-time decisions at scale. The core of our strategy is to empower customers with always-on, real-time customer insights that deliver connected decisions and continuous learning throughout the entire customer lifecycle. Our innovations will be on display at FICO World 2026, which is going to happen May 19th through 22 in Orlando, Florida. FICO World brings together customers and partners from around the world, allowing participants to collaborate on how FICO platform makes real-time decisions at scale to optimize interactions with consumers. At FICO, we're obsessed with powering consumer connections and delivering always-on personalized experiences to drive outsized business outcomes. At FICO World 26, you can network with the world's leading experts, to learn how you can power your organization, apply best practices in advanced platform decisioning, and drive financial inclusion. I'm going to now hand it over to Steve to provide further financial details.

Thanks and good afternoon, everyone. As Will mentioned, our score segment revenues for the quarter were $305 million, up 29% in the prior year. As shown on page 13 of our presentation, B2B revenues were up 36%, primarily attributable to higher mortgage origination scores unit price and an increase of volume in mortgage originations. Our B2C revenues were up 5% versus the prior year, driven mainly by our indirect channel partners. First quarter mortgage originations revenues were up 60% versus the prior year. Mortgage originations revenues accounted for 51% of B2B revenue and 42% of total scores revenue. Auto originations revenues were up 21%, while credit card, personal loan, and other originations revenues were up 10% versus the prior year. For your reference, page 14 of our presentation provides five-quarter trending on all of our scores metrics. Turning to our software segment, our software ACV bookings for the quarter were a record $38 million, as shown on page 15 of the presentation. This quarter included an above average size international multi-use case platform deal. On a trailing 12 month basis, ACV bookings reached $119 million this quarter, an increase of 36% from the same period last year. Our strong bookings in recent quarters gives us increased confidence that our ARR growth will continue to accelerate in FY26. Our total software ARR is shown on page 16 with $766 million, a 5% increase over the prior year. Platform ARR was $303 million, representing 40% of our total Q1 26 ARR. Platform ARR grew 33% versus the prior year, while non-platform declined 8% to $463 million this quarter. Platform ARR was driven by both new customer wins, as well as expanded use cases and volumes from existing customers. We also migrated our non-platform liquid credit solution to the platform. Excluding that liquid credit migration, our platform ARR growth was in the high 20% range. The non-platform year-over-year ARR decline was driven primarily by migrations, the end of life of a legacy authentication suite solution, and some usage declines. In our CCS business, ARR growth was relatively flat. Our dollar-based net retention rate in the quarter was 103%, platform NRR was 122%, while our non-platform NRR was 91%. Platform NRR was driven by a combination of new use cases and increased usage of existing use cases. We now have over 150 customers on FICO Platform, with more than half leveraging FICO Platform for multiple use cases. First quarter software segment revenues, detailed on page 17, were $207 million, up 2% from the prior year. Within the segment, our SaaS revenues grew 12%, driven by FICO Platform. Our on-premises revenues declined 12%, primarily driven by lower point-in-time revenues. Year over year, our platform revenues grew 37% and our non-platform revenues declined 13%. As a reminder, our FY26 revenue guidance reflects an expectation of lower point-in-time revenues throughout FY26 due to fewer non-platform license renewal opportunities compared to the prior year. From a regional lens, 88% of total company revenues this quarter were derived from our Americas region, which is a combination of our North America and Latin America regions. Our EMEA region generated 8% of revenues, and the Asia Pacific region delivered 4%. Operating expenses for the quarter, as shown on page 18, were $278 million this quarter versus $279 million in the prior quarter, which included $10.9 million in restructuring charges. Excluding restructuring, expenses grew 4% quarter over quarter, driven primarily by personnel expenses. We expect operating expense dollars to continue to trend upward modestly throughout the fiscal year. Our non-GAAP operating margin, as shown on page 19, was 54% for the quarter, compared with 50% in the same quarter last year, which means we delivered year-over-year non-GAAP operating margin expansion of 432 basis points. The effective tax rate for the quarter was 17.5%. The operating tax rate was 25.7%. The primary difference between operating tax rate and net effective tax rate for the quarter is $15.7 million in excess tax benefit recognized upon the settlement or exercise of employee stock awards. We continue to expect a full year net effective tax rate of 24% and an operating tax rate of 25%. At the end of the quarter, we had $218 million in cash and marketable investments. Our total debt at quarter end was $3.2 billion, with a weighted average interest rate of 5.22%. As of December 31st, 2025, 87% of our debt was held in senior notes with no term loans. We had $415 million balance on our revolving line of credit, which is repayable at any time. As Will highlighted, we continue to return capital to our shareholders through buybacks, as shown on page 20. In Q1, we repurchased 95,000 shares for a total cost of $163 million. and we continue to view share repurchases as an attractive use of cash. With that, I'll turn it back to Will for his closing comments.