Stock Analysis on Net
Stock Analysis on Net

Fair Isaac Corp. (NYSE:FICO) 

Common-Size Income Statement

Fair Isaac Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Sep 30, 2024 Sep 30, 2023 Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019
On-premises and SaaS software 41.42 42.30 41.01 39.34 45.16 48.01
Professional services 5.04 6.58 7.69 10.98 14.02 15.68
Scores 53.55 51.13 51.31 49.69 40.83 36.31
Revenues 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of revenues -20.27 -20.55 -21.94 -25.25 -27.90 -29.04
Gross profit 79.73% 79.45% 78.06% 74.75% 72.10% 70.96%
Research and development -10.01 -10.57 -10.66 -13.01 -12.86 -12.89
Selling, general and administrative -26.95 -26.47 -27.87 -30.10 -32.52 -35.69
Amortization of intangible assets -0.05 -0.07 -0.15 -0.25 -0.39 -0.53
Restructuring charges 0.00 0.00 0.00 -0.60 -3.48 0.00
Gain on product line asset sale 0.00 0.13 0.00 7.61 0.00 0.00
Operating income 42.71% 42.47% 39.38% 38.40% 22.86% 21.86%
Interest expense, net -6.15 -6.31 -5.01 -3.05 -3.26 -3.43
Other income (expense), net 0.82 0.42 -0.16 0.59 0.25 0.20
Income before income taxes 37.38% 36.58% 34.22% 35.94% 19.85% 18.63%
Provision for income taxes -7.52 -8.21 -7.10 -6.16 -1.59 -2.06
Net income 29.86% 28.37% 27.12% 29.78% 18.26% 16.56%

Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).

Revenue Composition
Over the analyzed periods, the proportion of revenues derived from on-premises and SaaS software exhibited a declining trend initially, dropping from 48.01% in 2019 to 39.34% in 2021, before slightly recovering to around 41.42% by 2024. Professional services as a percentage of revenues consistently decreased, falling from 15.68% in 2019 to 5.04% in 2024. In contrast, the segment labeled "Scores" demonstrated a strong upward trajectory, increasing steadily from 36.31% of revenues in 2019 to 53.55% in 2024, becoming the dominant revenue contributor.
Profitability Metrics
Cost of revenues steadily declined as a percentage of total revenues, moving from 29.04% in 2019 down to 20.27% in 2024, indicating an improvement in cost efficiency. Correspondingly, gross profit margin progressively increased, rising from 70.96% to 79.73% over the same period, reflecting enhanced profitability at the gross level.
Operating Expenses and Specific Charges
Research and development expenses remained relatively stable as a percentage of revenues, fluctuating slightly around a range of approximately 10.0% to 13.0%, with a slight decreasing trend towards 2024. Selling, general and administrative expenses showed a consistent decrease as a percent of revenues, from 35.69% in 2019 to near 26.95% in 2024, suggesting improved operational efficiency or cost control measures. Amortization of intangible assets steadily diminished, indicating lower amortization expenses relative to revenue. Restructuring charges appeared only in 2020 and 2021, representing minor impacts, while gains on product line asset sales occurred sporadically in 2021 and 2023 with modest positive contributions to revenue.
Operating and Net Income
Operating income as a percentage of revenues showed a notable rise, nearly doubling from 21.86% in 2019 to approximately 42.71% in 2024, indicating significant improvement in operating efficiency and profitability. Interest expense, net, although initially stable around 3.0%, increased in relative terms beginning in 2022, reaching over 6% by 2024, which may reflect higher borrowing costs or increased debt levels. Other income (expense), net, fluctuated but remained generally positive in later years, potentially adding to overall profitability.
Income Tax and Net Profitability
Income before income taxes climbed substantially from 18.63% of revenues in 2019 to 37.38% in 2024. The provision for income taxes as a percentage of revenues rose from a modest 2.06% in 2019 to a range near 7-8% after 2020, indicating higher tax expenses relative to revenues. Nevertheless, net income as a percentage of revenues exhibited strong growth, increasing from 16.56% in 2019 to almost 30% by 2024, underscoring improved bottom-line profitability.
Summary
The analyzed data reveal a clear trend towards increasing reliance on the "Scores" revenue segment and a decreasing share of professional services. Cost management appears effective, supported by rising gross and operating margins. Operating income and net income margins have significantly improved over the period, while interest expense has increased as a percentage of revenue recently. Overall, the company demonstrates enhanced profitability and operational efficiency, with some attention needed on managing rising interest expenses.