Here are 1-3 brief analogies for Fair Isaac (FICO):

• Intel for credit decisions.
• Microsoft Windows for credit scoring.
• The GPS for lending decisions.

• FICO Score: A three-digit number widely used by lenders to assess an individual's credit risk and creditworthiness.
• Decision Management Suite: A comprehensive software platform that enables organizations to automate and optimize business decisions across various operational functions.
• Fraud & Compliance Solutions: Software and services designed to detect and prevent financial crime and ensure regulatory compliance for businesses.
• Customer Management Solutions: Integrated software solutions that help businesses manage the entire customer lifecycle, from credit origination to account management and collections.
• Analytic Consulting: Expert professional services that assist clients in developing and implementing advanced analytics and decision management strategies.

Fair Isaac (FICO) Major Customers

Fair Isaac Corporation (FICO) primarily operates as a business-to-business (B2B) company, selling its predictive analytics, data management, and decision management solutions to other companies rather than directly to individuals. Its core products, including the well-known FICO® Score, are licensed to various institutions globally.

Major Customer Categories and Representative Public Companies:

1. Financial Institutions (Banks, Credit Card Issuers, Lenders)

This is FICO's largest and most prominent customer segment. Financial institutions utilize FICO's credit scoring models, decision management software, fraud detection tools, and other analytics to assess credit risk, manage portfolios, and optimize customer interactions throughout the customer lifecycle. While FICO works with thousands of institutions globally, the following are representative examples of major public companies in this category that are widely known to use FICO scores and related services:

• JPMorgan Chase & Co. (JPM)
• Bank of America Corporation (BAC)
• Wells Fargo & Company (WFC)
• Citigroup Inc. (C)
• American Express Company (AXP)
• Capital One Financial Corporation (COF)

2. Credit Bureaus (Credit Reporting Agencies)

FICO licenses its scoring models to the three major credit bureaus, which in turn provide these scores to lenders and consumers. These bureaus are critical partners in the distribution and accessibility of FICO scores:

• Equifax Inc. (EFX)
• TransUnion (TRU)
• Experian plc (EXPGY - U.S. ADR; Primary listing EXPN.L)

3. Other Industries

FICO's analytics and decision management platforms are also used in various other industries for purposes like fraud detection, customer acquisition, and collections. This includes sectors such as telecommunications, insurance, retail, utilities, and government agencies, although specific major public company names in these categories are not typically disclosed as primary customers by FICO due to the broad nature of its licensing.

• Experian (Symbol: EXPGY)
• Equifax (Symbol: EFX)
• TransUnion (Symbol: TRU)
• Amazon.com, Inc. (Symbol: AMZN)
• Microsoft Corporation (Symbol: MSFT)

The increasing adoption and regulatory acceptance of alternative credit scoring models, particularly VantageScore, as government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac move to incorporate these models into their mortgage underwriting processes. This development, expected to be fully implemented by Q1 2025, directly challenges FICO's long-standing dominance in the critical mortgage lending sector and provides a clear competitive alternative for lenders.

FICO's Main Products and Addressable Markets:

• Credit Scoring and Analytics: The global credit analytics and scoring market was valued at approximately USD 6.94 billion in 2023 and is projected to reach USD 17.58 billion by 2033, growing at a CAGR of 9.77% from 2024 to 2033.
• Fraud Detection and Prevention: The global fraud detection and prevention market size was valued at USD 33.74 billion in 2023 and is expected to reach USD 195.91 billion by 2032, expanding at a compound annual growth rate (CAGR) of 21.60% during the forecast period from 2024 to 2032.
• Decision Management Software/Enterprise Decision Management: The global decision management software market size was estimated at USD 10.9 billion in 2023 and is projected to grow to USD 32.7 billion by 2032, at a CAGR of 13.0% from 2024 to 2032. This market includes solutions for credit risk management and other analytical applications. The credit risk management software market specifically was valued at USD 7.2 billion in 2022 and is projected to grow to USD 20.3 billion by 2032, at a CAGR of 11.2% during the forecast period.

Expected Drivers of Future Revenue Growth for Fair Isaac (FICO) Over the Next 2-3 Years

• Cloud Transformation and Increased Subscription Revenue: A significant driver of future revenue growth for FICO is the ongoing migration of its customers to cloud-based solutions and the associated increase in recurring subscription revenue. This involves transitioning existing clients to the FICO Cloud and attracting new clients with the benefits of its scalable and integrated cloud offerings. As more clients adopt FICO's cloud-native platforms, the company benefits from more predictable, recurring revenue streams and potentially higher customer lifetime value.
• Expansion of FICO Platform Adoption: FICO's integrated decisioning platform is a key focus for growth. Increased adoption of the FICO Platform by both existing and new customers is expected to drive revenue. This includes clients expanding their use of various modules and services within the platform, thereby deepening their engagement and increasing the value derived from FICO's comprehensive analytical and decisioning capabilities.
• Growth in FICO Scores and Industry-Specific Solutions Volume: Continued strong demand for FICO Scores in credit originations and portfolio management across various industries, coupled with the expansion of other specialized solutions (e.g., fraud detection, compliance, marketing analytics), will contribute to revenue growth. As businesses increasingly rely on data-driven decisions, the volume of FICO Scores utilized and the uptake of its tailored solutions are expected to rise globally.
• Strategic Market Expansion: FICO is anticipated to drive revenue growth through strategic expansion into new geographic markets and by broadening its customer base within existing markets. This includes targeting underserved regions or industries where there is a growing need for advanced analytics, risk management, and customer decisioning solutions. Expanding market penetration allows FICO to capture new revenue opportunities.
• Leveraging Data and Analytics for Enhanced Product Offerings: FICO's extensive data assets and analytical expertise will continue to fuel the development and enhancement of new products and services. By continuously innovating and introducing solutions that address evolving client needs in areas like fraud prevention, regulatory compliance, and customer engagement, FICO can generate new revenue streams and strengthen its competitive position.

Share Repurchases

• Fair Isaac repurchased approximately $1.7 billion of its common stock over the three fiscal years ending Q3 FY24.
• The company's Board of Directors authorized an additional $500 million share repurchase program in November 2023.
• Prior to that, a $500 million share repurchase program was authorized in February 2022, and another $500 million program was authorized in November 2021.

Outbound Investments

• In September 2022, Fair Isaac acquired Deed Research for approximately $55 million.

Capital Expenditures

• Fair Isaac's capital expenditures were $52.7 million for fiscal year 2023 and $56.6 million for fiscal year 2022.
• The company anticipates capital expenditures to be in the range of $50-60 million for fiscal year 2024.