The 10-second takeaway
For the quarter ended June 30 (Q3), Fair Isaac met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share grew significantly. GAAP earnings per share contracted.
Margins dropped across the board.
Fair Isaac notched revenue of $183.8 million. The two analysts polled by S&P Capital IQ expected to see sales of $184.3 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $160.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.80. The three earnings estimates compiled by S&P Capital IQ predicted $0.73 per share. Non-GAAP EPS of $0.80 for Q3 were 36% higher than the prior-year quarter's $0.59 per share. GAAP EPS of $0.54 for Q3 were 8.5% lower than the prior-year quarter's $0.59 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 68.6%, 160 basis points worse than the prior-year quarter. Operating margin was 19.3%, 400 basis points worse than the prior-year quarter. Net margin was 10.7%, 220 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $209.6 million. On the bottom line, the average EPS estimate is $1.05.
Next year's average estimate for revenue is $762.1 million. The average EPS estimate is $3.18.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 85 members out of 108 rating the stock outperform, and 23 members rating it underperform. Among 40 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 36 give Fair Isaac a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Fair Isaac is hold, with an average price target of $49.75.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.