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Why Fair Isaac Stock Jumped 10% Today

By Joe Tenebruso – Updated Nov 5, 2019 at 11:32AM

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Investors cheered the analytics provider's fourth-quarter earnings.

What happened

Shares of Fair Isaac (FICO -1.32%) climbed more than 10% on Tuesday, following the release of the predictive-analytics and decision-management software company's fiscal fourth-quarter results. 

So what

FICO's revenue jumped 19% year to year to $305.3 million, besting Wall Street's expectations for revenue of $287.7 million. The gains were broad-based; revenue in its applications, scores, and decision-management segments rose 8%, 30%, and 41%, respectively.

Profit growth was even more impressive. Its non-GAAP (adjusted) net income surged 48% to $60.8 million, while its non-GAAP earnings per share -- which were boosted by share repurchases -- increased 50% to $2.01. That was well above analysts' estimates for adjusted EPS of $1.71. 

Better still, cash flow generation continues to strengthen. The company's operating cash flow rose 59% to $95.4 million. Free cash flow, meanwhile, soared 69% to $89.6 million.

A rising stock chart

FICO's stock popped after it delivered strong Q4 results. Image source: Getty Images.

Now what

The company also issued a forecast for fiscal 2020, including:

  • Revenue of $1.245 billion, up approximately 7% year over year.
  • GAAP net income of $204 million, up 6%.
  • GAAP earnings per share of $6.75, up 6%.
  • Non-GAAP net income of $251 million, up 10%.
  • Non-GAAP EPS of $8.30, up 11%.

"As we move into fiscal 2020, I'm pleased with the progress we've made and excited for what lies ahead," CEO Will Lansing said during a conference call with analysts. "The investments we've been making on the software side have been leading to growth in bookings and recurring sustainable revenue. And on the scores side, the business is stronger than ever and we continue to drive value out of these incredible assets."

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Fair Isaac. The Motley Fool has a disclosure policy.

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