Founded in 1956, Fair Isaac (NYSE:FICO) was a pioneer in data analytics. Ever since, businesses and people alike have been using its services and products to make quicker, more intelligent decisions. When the company reported its 2019 second-quarter earnings earlier this week, it looked to continue the momentum it's had since the beginning of the year, with shares up almost 50% year to date.  

Let's look at whether the company best known for its credit scores succeeded.

FICO: The raw numbers

FICO Metrics Q2 2019 Q2 2018 Change
Revenue $278 million $256 million 9%
GAAP EPS $1.10 $1.00 10%
Free cash flow $43.6 million $42.2 million 3%
Bookings $105.7 million $101.7 million 4%

Data source: Fair Isaac.

Woman checks her credit score on a sheet of paper.

Fair Isaac generates credit scores used in 95% of all U.S. lending decisions. Image source: Getty Images.

What happened with Fair Isaac this quarter?

Two of Fair Isaac's business segments saw strong growth, but its largest division experienced a modest decline. 

  • Applications is the company's largest business segment, consisting of preconfigured apps that are used in marketing, account origination, customer management, fraud, collections, and insurance claims. Revenue here came in at $141.8 million, a 3% year-over-year decrease.  
  • Scores is the segment responsible for FICO scores, which are used in 95% of U.S. credit decisions. Revenue reached $104.4 million, up 20% year-over-year.
  • Decision management software provides analytic platforms that businesses use to build their own customized data management. Revenue in this segment rose 42% from last year's comparable quarter to $32 million.
  • Adjusted EBITDA rose to $76.5 million, up 5% year over year. 

What management had to say

CEO Will Lansing seemed pleased with the results.

"We had another strong quarter of both revenues and bookings," he said. "We are pleased to be able to raise our full-year guidance." 

Looking forward

Here's a fuller look at Fair Isaac's guidance.

  • The company raised its full-year revenue guidance to $1.14 billion, a $15 million increase.
  • Projected GAAP net income was raised $5 million to $173 million, and expected non-GAAP net income went up $5 million to $214 million.
  • Anticipated GAAP earnings per share (EPS) was raised $0.22 to $5.75, and non-GAAP EPS went up $0.24 to $7.12.

Based on the company's full-year 2019 adjusted EPS guidance, shares trade at a forward P/E ratio of about 39.3.  

Investors will also look for Fair Isaac to capitalize on more international opportunities, as it did in the first quarter. In Q1, the company announced that an innovative credit risk score it developed had been used 11 million times since 2016, giving millions of Mexican consumers the chance to secure financing and loans. U.K.-based fintech start-up Evergreen Finance also said it would be using the FICO Decision Modeler to automate its lending decisions. And Banco Santander Brasil said it could now deploy and switch lending strategies in half the time using the FICO Decision Management Suite.