Which Gives You More High-Margin Software Growth, PTC Or Fair Isaac?

For questions about this article or underlying research, email help@trefis.com.

Investors own both PTC (PTC) and Fair Isaac (FICO) for high-margin software that keeps growing, but the two companies expand in different ways. PTC sells subscriptions to the design and product data software engineers use, and management expects AI to help that business. Fair Isaac’s latest growth came largely from charging more for the credit scores used in mortgage lending. Has either kind of growth held up since both companies reported in July?

Has Growth Held Up At Fair Isaac And PTC?

Fair Isaac’s growth held up through its July report, but the housing regulator has since said changes are under way in the mortgage market where that growth originated. During fiscal Q3 2026, Fair Isaac’s mortgage origination revenue rose 97% while mortgage score volumes grew in the low single digits. Management credited the revenue increase mainly to a higher price per mortgage score, and raised its fiscal 2026 revenue guidance to $2.53 billion. Then on September 29, the head of the Federal Housing Finance Agency said the mortgage pricing grid is being simplified and that VantageScore, a rival score, is being incorporated, according to news reports. On October 23, Fair Isaac said it would hold its wholesale mortgage score price at $10 for lenders in its Preferred Program.

A pickup in PTC’s growth remains a forecast. Management guided for fiscal 2026 growth of 9% to 9.5% in annual recurring revenue, the yearly value of PTC’s subscriptions, excluding businesses it sold. Management added that PTC holds about twice the deferred ARR, subscriptions signed but not yet started, that it had a year earlier. This would bring faster growth if PTC signs as much new business in fiscal 2027 as in fiscal 2026. On October 5, PTC signed a deal to be bought by Schneider Electric for $205 a share in cash, about $22.6 billion in all. That caps a PTC holder’s gain near $205, against the stock’s October 29 close of $194.80.

The news differs in kind for each company. Fair Isaac’s growth is already in its results, and the regulator’s move touches its market. PTC’s speed-up is still management’s expectation, and its holders are now set to be paid out in cash.

How Much Debt Sits Behind Each Company?

Fair Isaac carries about 3.5 times the debt of PTC. To fund a share repurchase, Fair Isaac took out a $1.5 billion term loan in June. This borrowing took total debt to $5.58 billion, and management said cash will go to paying debt down in the near term.

PTC ended June with total debt of $1.61 billion, against cash of $351 million. Fair Isaac held $248 million of cash at the end of June. PTC also bought back $525 million of its stock in fiscal Q3 2026. Fair Isaac does produce slightly more free cash flow, generating $961 million over twelve months against $935 million at PTC.

Where Fair Isaac Leads And Where PTC Does

Fair Isaac leads on growth and margin, and PTC carries less debt. Over the twelve months ended in June 2026, Fair Isaac’s revenue grew 24.1%, against 19.5% for PTC. Fair Isaac also grew faster on average across the three latest twelve-month periods. PTC’s revenue fell 6.8% in fiscal Q3 2026, a comparison management said is affected by its sale of Kepware and ThingWorx in March. Fair Isaac’s revenue rose 25.7% in the same quarter.

Fair Isaac posted a 52.1% operating margin over twelve months, against 38.2% at PTC. PTC’s debt, though, equals just 7.2% of its market value, against 34.8% for Fair Isaac.

PTC trades at 18.3 times earnings, against 19.7 times for Fair Isaac. PTC’s twelve-month earnings include fiscal Q2 2026, a quarter when its net income of $591 million came in well above its operating income of $296 million. This makes PTC look cheaper on earnings than its operations alone would make it. On sales, Fair Isaac is the cheaper stock, trading at 6.7 times against 7.6 for PTC.

On these measures, Fair Isaac gives you more high-margin software growth, and PTC gives you far less debt. If you hold PTC, though, the signed cash takeover matters more than either measure, since it limits your return to the deal price. Fair Isaac’s growth in the latest quarter came mainly from a higher mortgage score price, in a market where the regulator has said changes are under way. A slowdown in that business would leave a Fair Isaac holder with the heavier debt. A pickup in PTC’s subscription growth remains management’s forecast, and PTC reports its own results on November 4. Fair Isaac’s mortgage origination revenue, which it is expected to report in November 2026, is the result that could change which company gives you more growth. That report covers the quarter that ended September 30, a day after the regulator’s remarks.

Does This Mean You Should Act On PTC?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

Spot an error or want more like this? Tell us in 10 seconds.