What happened

Shares of Fair Isaac (NYSE:FICO) jumped as much as 10% this morning after the company reported fiscal fourth-quarter earnings. As of 12:10 p.m. EST, the stock was up 8%.

So what

Revenue in the fiscal fourth quarter came in at $374.4 million, well ahead of the $316.4 million in sales that Wall Street analysts were modeling for. That resulted in adjusted net income of $97 million, or $3.25 per share, compared to the consensus estimate of just $2.32 per share in adjusted profits. The analytics software company, which also created the popular FICO credit score, said bookings were $234.6 million.

A credit report with a credit score next to a cup of coffee

Image source: Getty Images.

"We had a remarkably strong finish to another great year," CEO Will Lansing said in a statement. "Even in a period of economic volatility, we delivered record revenues, net income and cash flows."

Now what

The decision management software applications segment, which is Fair Isaac's largest business, saw sales jump 12% due to increased demand for fraud detection and debt management applications. Revenue in the scores business increased by 32% as mortgage origination volumes rose and the company booked a one-time royalty gain.

Fair Isaac did not provide specific guidance for fiscal 2021 due to ongoing macroeconomic uncertainties related to the pandemic, but it did offer some qualitative commentary. The company has shifted to a subscription model, which will impact how revenue is recognized. Unlike on-premise software sales, that revenue will not be recognized up front but will instead be spread out over time.

"We can't pin down exact expectations [for fiscal 2021] but we've proven our business is remarkably resilient, and we're well positioned for the future," Lansing said on the analyst conference call. "We'll continue to innovate, fine tune and improve our business model with an eye toward improving margins and delivering on our potential."

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