Fair Isaac Corp. (NYSE:FICO)

The Return on Assets (ROA) exhibits a generally increasing trend starting from the period ending September 30, 2019. Initial values near 13.4% gradually rise over successive quarters, reaching over 33.98% by the period ending June 30, 2025. This steady growth suggests an improving efficiency in asset utilization to generate earnings over time.

Financial Leverage shows significant fluctuation over the observable periods. Starting at 5.73 in December 31, 2018, it declines steadily to a low of 4.85 by September 30, 2020. Subsequently, there is a pronounced spike to 7.07 by March 31, 2021 and an even more dramatic increase to 12.73 by June 30, 2021. Data for later periods is missing, preventing further trend analysis for this metric.

The Return on Equity (ROE) values, available for selected quarters, indicate a volatile but mostly upward movement. Beginning at 66.3% on September 30, 2019, ROE surges to a peak of 292.77% by September 30, 2021. This sharp increase corresponds to periods where financial leverage also peaked, suggesting that higher leverage may be amplifying returns to equity holders. After this peak, data is unavailable for subsequent quarters, limiting further assessment.

In summary, the company demonstrates strengthening asset profitability as evidenced by the ascending ROA. The fluctuation and sharp increase in financial leverage in early 2021 coincide with the marked spikes observed in ROE, implying a greater use of debt or other liabilities to boost equity returns during that period. However, the absence of more recent leverage data restrains comprehensive understanding of ongoing financial strategy and risk exposure. The data implies effective management of assets and equity returns, albeit with periods of increased financial risk as indicated by leverage variance.

The analyzed quarterly financial data reveals several notable trends and shifts in key financial ratios over the observed periods.

Net Profit Margin (%)

The net profit margin displays a generally upward trajectory from 16.56% in the initial measurement period to 32.8% by the end of the latest period. There are occasional fluctuations, such as a slight dip around September 2022 to 27.04%, but the overall trend points to improving profitability. This indicates enhanced operational efficiency or improved pricing power over time.

Asset Turnover (ratio)

The asset turnover ratio starts at 0.81 in the earlier reported period and shows gradual improvement to around 1.04 towards the latest period. Notably, the ratio remained relatively stable around the 0.8 to 0.9 range before 2022 and then increased steadily, suggesting improved utilization of assets to generate revenue. This trend reflects increasing operational efficiency in asset management.

Financial Leverage (ratio)

The financial leverage ratio exhibits a significant initial decrease from 5.73 to 4.95 followed by an increase peaking at 12.73 in one period. However, data for several subsequent periods are missing, limiting full trend analysis. The early volatility suggests fluctuating reliance on debt or equity financing, though insufficient data hampers conclusive statements for recent periods.

Return on Equity (ROE) (%)

Return on equity shows a marked increase from 66.3% to an exceptionally high 292.77% within the reported timeframe, albeit with gaps in data toward later periods. The high ROE levels reflect strong profitability relative to shareholder equity in specific quarters, possibly influenced by financial leverage or extraordinary items. The absence of complete data restricts comprehensive analysis for the latest periods.

In summary, the financial performance indicated by the profit margin and asset turnover ratios points to consistent improvements in profitability and asset utilization efficiency over time. The observed fluctuations in financial leverage suggest variable financial structuring, while the exceptionally high but partially incomplete ROE data highlights periods of significant shareholder value creation, though caution is advised in interpretation due to missing data points.

The analyzed data reveals evolving financial performance patterns over multiple quarters, with notable shifts in profitability, operational efficiency, and capital structure metrics.

Tax Burden

The tax burden ratio, observed from December 2019 onward, fluctuates modestly within a range of approximately 0.78 to 0.96. It peaked around the early quarters of 2020 near 0.96 and subsequently stabilized in the lower 0.8 range through the following years, indicating a consistent level of tax impact on pre-tax earnings after an initial prominent period.

Interest Burden

The interest burden ratio demonstrates a steady improvement initially, rising from 0.84 to values around 0.92 between late 2019 and early 2021. Following that phase, it experiences a slight reduction and stabilization close to 0.85–0.86 towards the more recent quarters, suggesting controlled interest expenses relative to earnings before interest and taxes over time.

EBIT Margin

The EBIT margin shows a clear upward trend, starting at approximately 22% at the end of 2019 and increasing substantially to over 40% by late 2021. This growth continues steadily, reaching above 46% by mid-2025, reflecting significant enhancement in operating profitability. This suggests improved operational efficiency or pricing power over the analyzed periods.

Asset Turnover

Asset turnover ratios maintain a relatively stable trajectory initially, fluctuating near the higher 0.7 to 0.85 range up to early 2021. Subsequently, a continuous increase is evident, with the ratio rising steadily above 0.9 and eventually surpassing the 1.0 threshold by mid-2024. This indicates improving effectiveness in utilizing assets to generate revenue over successive quarters.

Financial Leverage

Financial leverage exhibits substantial variability. Starting from a level near 5.7, the ratio decreases gradually to approximately 4.85 by late 2019. However, it surges again to exceed 12 by early 2021, indicating considerable variation in the company's reliance on debt or equity financing within the recorded span. Later data for this metric is not available, precluding a comprehensive longer-term assessment.

Return on Equity (ROE)

ROE experiences remarkable volatility and growth between late 2019 and early 2021, climbing from around 66% to an exceptional peak of nearly 293% in mid-2021. This substantial increase suggests periods of extraordinary profitability or financial leverage effects. Due to missing data beyond this point, it is not possible to assess whether this trend continues or normalizes in subsequent quarters.

In summary, profitability and operational efficiency indicators, particularly EBIT margin and asset turnover, show consistent improvement over the periods analyzed, reflecting strengthening core business performance. Tax and interest burdens stabilize after initial fluctuations, supporting sustainable profitability. Financial leverage and ROE data reveal periods of considerable variation, notably peaking in early 2021, indicative of shifts in capital structure and high returns possibly associated with leverage or exceptional earnings episodes.

The financial data indicates a clear pattern of improvement in profitability and efficiency ratios over the analyzed periods.

Net Profit Margin

The net profit margin shows a notable upward trend from 16.56% starting in late 2018 to a peak exceeding 32% by the end of the most recent period. There is some variability, but overall the margin consistently improves, indicating enhanced cost management or revenue quality leading to higher profitability relative to sales.

Asset Turnover

This ratio, which measures the efficiency of asset use in generating sales, shows a gradual increase from approximately 0.81 to values fluctuating around 1.00 or higher in the latest periods. This suggests a strengthening in how effectively assets are being utilized to produce revenue, reflecting operational improvements or asset base optimization.

Return on Assets (ROA)

The return on assets follows a similarly positive path, lifting from near 13.4% to a level close to 34% by the end of the data set. This improvement mirrors the gains in both profit margin and asset turnover, and confirms that the company is realizing higher returns on each unit of assets invested, signaling robust operational efficiency and profitability growth.

Overall, the trends highlight sustained increases in profitability and asset utilization efficiency, suggesting successful strategic execution and improved financial health over the observed quarters.

The analysis of the financial ratios reveals several informative trends concerning operational efficiency, profitability, and financial burden over the observed periods.

Tax Burden

The Tax Burden ratio exhibits moderate fluctuations, initially rising from 0.89 to a peak near 0.96, and then generally declining to stabilize around 0.78 to 0.82 in the later periods. This suggests a varying tax impact on earnings, with a relative reduction or optimization of tax expenses observed over time, contributing positively to net returns.

Interest Burden

This ratio displays a gradual improvement, moving from approximately 0.84 to around 0.86 by the end of the last periods. The gradual increase implies a slight reduction in interest expenses relative to earnings before interest and taxes, indicating improving financial leverage or debt management strategies.

EBIT Margin

The EBIT Margin percentage demonstrates a strong upward trend from just above 22% initially to over 46% by the last reported period, more than doubling. This substantial increase indicates enhanced profitability from operations, driven potentially by higher revenues, improved cost control, or both, reflecting strong operational performance over time.

Asset Turnover

The Asset Turnover ratio shows a steady increase from around 0.77 to above 1.0, indicating improving efficiency in the use of assets to generate sales. The consistent upward trend signifies better asset management or growth in revenue outpacing asset growth, contributing to enhanced operational efficiency.

Return on Assets (ROA)

The Return on Assets percentage echoes the positive trends in profitability and asset utilization, rising significantly from about 13.4% to nearly 34%. This reflects the combined effect of improved EBIT margin and asset turnover, signaling stronger overall asset profitability and effective management strategies capitalizing on operational improvements.

Overall, the data indicates a company experiencing substantial improvements in operational efficiency and profitability, coupled with a moderate reduction in financial burdens related to taxes and interest. The strengthening EBIT margin and asset turnover ratios are key drivers behind the rising ROA, suggesting an increasingly effective use of resources to generate earnings.

The analysis of the financial ratios over the reported periods reveals several notable trends and fluctuations in profitability and cost efficiency metrics.

Tax Burden Ratio

This ratio begins to be reported from the quarter ending December 31, 2019, at 0.89, then increases and peaks at 0.96 in September 2019 before generally trending downward to a range between 0.78 and 0.82 in the latest periods. The overall trend suggests a slight decrease in the proportion of earnings paid as taxes over time, indicating a somewhat more favorable tax position or changes in tax strategy.

Interest Burden Ratio

The interest burden remains relatively stable throughout the available quarters, starting at 0.84 and gradually rising to 0.86, with minor fluctuations. This stability indicates consistent management of interest expenses relative to operating income, suggesting that financing costs and debt servicing have not materially worsened or improved during the periods.

EBIT Margin

The EBIT margin shows a consistent upward trend, increasing from approximately 22% to over 46% by the end of the latest reported quarter. There is a noticeable acceleration in margin improvement beginning in late 2020 and continuing through 2024. This improving profitability at the operating level indicates enhanced operational efficiency, pricing power, or a favorable business mix over the periods.

Net Profit Margin

Similar to the EBIT margin, the net profit margin shows a marked increase from just over 16% to above 32%. The margin experiences a significant rise starting around 2020, with some fluctuations but an overall positive trajectory. This increase suggests not only improved operational performance but also effective management of taxes and interest expenses, contributing to higher retained earnings.

In summary, the company's profitability ratios show clear improvement, with both EBIT and net profit margins nearly doubling over the observed timeline. The tax burden has trended slightly downwards after an initial peak, while the interest burden has remained steady. These patterns collectively indicate strengthening financial health, operational success, and effective cost and tax management over the analyzed periods.