Fair Isaac Corp. (NYSE:FICO)

Return on Assets (ROA)

The Return on Assets demonstrates a consistent and notable upward trend over the six-year period. Starting at 13.4% in 2019, it increased steadily each year, reaching 29.85% in 2024. This indicates improving efficiency in the use of assets to generate profits, nearly more than doubling over the timeframe analyzed.

Financial Leverage

Financial leverage ratios are only available for 2019 and 2020, showing a slight decline from 4.95 to 4.85. The absence of data beyond 2020 restricts the ability to analyze longer-term trends in the company’s use of debt relative to equity or assets.

Return on Equity (ROE)

Return on Equity is provided for 2019 and 2020 only, with an increasing trend from 66.3% to 71.41%. This suggests a strong and improving capacity to generate returns for shareholders during this period. However, the lack of subsequent data limits trend assessment beyond 2020.

Net Profit Margin

The net profit margin exhibited a generally positive trend over the six-year period. Starting at 16.56% in 2019, it increased to 18.26% in 2020, followed by a significant jump to 29.78% in 2021. Although there was a slight decline to 27.12% in 2022, the margin rose again to 28.37% in 2023 and further to 29.86% in 2024. Overall, the margin nearly doubled from 2019 to 2024, indicating improved profitability.

Asset Turnover

Asset turnover remained relatively stable but showed gradual improvement. It started at 0.81 in both 2019 and 2020, increased modestly to 0.84 in 2021, and saw a more pronounced increase to 0.96 in 2022 and 2023. The latest figure in 2024 reached 1.0, suggesting enhanced efficiency in utilizing assets to generate revenue.

Financial Leverage

Financial leverage data is only available for the years 2019 and 2020, with a slight decrease from 4.95x to 4.85x. The absence of data beyond 2020 limits the ability to analyze recent leverage trends.

Return on Equity (ROE)

Return on Equity is reported only for 2019 and 2020, showing an increase from 66.3% to 71.41%. This indicates strong profitability and effective use of equity capital during those years. However, the lack of data in subsequent years restricts further trend analysis.

Tax Burden

The tax burden ratio shows a downward trend from 0.89 in 2019 to a low of 0.78 in 2023, followed by a slight increase to 0.80 in 2024. This indicates a gradual reduction in the proportion of earnings paid as taxes over the initial years, stabilizing near 0.80 in the most recent period.

Interest Burden

The interest burden ratio fluctuated moderately, starting at 0.84 in 2019 and peaking at 0.92 in 2021. It then declined to 0.85 by 2023, with a minor increase to 0.86 projected for 2024. Overall, it suggests a variable but relatively stable interest expense impact on earnings before taxes.

EBIT Margin

The EBIT margin demonstrates a consistent and significant upward trend throughout the periods analyzed. Beginning at 22.05% in 2019, it increased sharply to nearly 39% by 2021, and further to 43.53% in 2024. This reflects improving operational efficiency and profitability at the earnings before interest and taxes level.

Asset Turnover

Asset turnover ratios remained steady at 0.81 in 2019 and 2020, followed by a gradual increase to 0.84 in 2021, and a marked rise to around 0.96 in 2022 and 2023. The ratio is projected to reach 1.0 in 2024, indicating enhanced effectiveness in generating revenue from asset investments over time.

Financial Leverage

Available data for financial leverage is limited to 2019 and 2020, showing a slight decrease from 4.95 to 4.85. The absence of later data prevents assessment of leverage trends beyond 2020.

Return on Equity (ROE)

ROE increased from 66.3% in 2019 to 71.41% in 2020. Data for subsequent years is missing, so further trend analysis is not feasible. The available figures portray a strong and improving return on shareholders’ equity in the earlier periods.

Net Profit Margin

The net profit margin shows a generally increasing trend over the analyzed period, beginning at 16.56% in 2019 and rising to 29.86% by 2024. A significant jump occurred between 2020 and 2021, increasing from 18.26% to 29.78%, followed by moderate fluctuations but maintaining levels above 27%, indicative of improved profitability and effective cost management.

Asset Turnover

The asset turnover ratio remained relatively stable at 0.81 from 2019 to 2020, with a gradual improvement thereafter. It increased to 0.84 in 2021, followed by more marked rises to 0.96 in 2022 and 2023, and reaching 1.00 in 2024. This suggests enhanced efficiency in utilizing assets to generate revenue over time.

Return on Assets (ROA)

The return on assets experienced steady growth throughout the period. Starting at 13.4% in 2019, it increased consistently, with a prominent rise to 25.01% in 2021. The upward trend continued through 2024, culminating at 29.85%. This reflects improved overall profitability relative to asset base, corroborating the positive trends observed in both net profit margin and asset turnover.

The financial data reveals several noteworthy trends in the company's performance from September 2019 through September 2024.

Tax Burden

The tax burden ratio exhibits a gradual decline from 0.89 in 2019 to a low of 0.78 in 2023, followed by a slight increase to 0.80 in 2024. This overall downward trend suggests an improving effective tax rate over the observed period, potentially enhancing net profitability.

Interest Burden

The interest burden ratio remains relatively stable, fluctuating modestly between 0.84 and 0.92. Despite minor variations, the ratio indicates consistent management of interest expenses relative to earnings before interest and taxes, without significant deterioration or improvement.

EBIT Margin

The EBIT margin demonstrates a strong upward trend, increasing substantially from 22.05% in 2019 to 43.53% in 2024. The increase is particularly pronounced between 2020 and 2021 and continues at a steady pace thereafter, suggesting enhanced operational efficiency and profitability at the core earnings level.

Asset Turnover

Asset turnover ratio shows a gradual increase from 0.81 in 2019 and 2020 to 1.00 in 2024, indicating improved efficiency in using assets to generate revenue. The steady rise suggests better utilization of company assets over time.

Return on Assets (ROA)

The ROA closely reflects the combined effect of margin and asset utilization improvements, rising significantly from 13.4% in 2019 to 29.85% in 2024. This nearly doubling of ROA highlights substantial enhancement in overall asset profitability over the period.

In summary, the company shows strong operational performance gains over the six-year period, marked by improving EBIT margins and efficient asset deployment. The slight decrease in tax burden further supports net profitability growth, while interest burden remains manageable. Collectively, these factors contribute to a markedly higher return on assets, indicating effective management and improved financial health.

The analysis of the financial ratios over the six-year period reveals several key trends regarding profitability and financial efficiency.

Tax Burden

The tax burden ratio shows a declining trend from 0.89 in 2019 to a low of 0.78 in 2023, followed by a slight increase to 0.80 in 2024. This indicates a gradual reduction in the proportion of earnings paid as taxes over most of the period, potentially reflecting improved tax management or changes in tax policy.

Interest Burden

The interest burden ratio remains relatively stable, fluctuating narrowly between 0.84 and 0.92. This stability suggests consistent management of interest expenses relative to earnings before interest and taxes, with a slight peak in 2021 at 0.92 and minor decreases thereafter.

EBIT Margin

The EBIT margin shows significant improvement, rising sharply from 22.05% in 2019 to 43.53% in 2024. The most notable increases occur between 2020 and 2021, and the growth trend continues steadily through 2024. This improvement highlights enhanced operational profitability and efficient cost control.

Net Profit Margin

The net profit margin follows a similar upward trajectory, increasing from 16.56% in 2019 to 29.86% in 2024. Despite a minor dip in 2022, the margin rebounds in subsequent years, indicating strong overall profit growth after all expenses, including taxes and interest.

Overall, the data reflects a positive trend in profitability metrics, underpinned by effective operational management and favorable tax conditions, alongside steady control of interest expenses. These trends suggest strengthening financial performance and improved value generation over the observed period.