Fair Isaac Corp. (NYSE:FICO)

The analysis focuses on the liquidity ratios of the company over multiple quarters, specifically the current ratio, quick ratio, and cash ratio from late 2018 through mid-2025.

Current Ratio

The current ratio demonstrates a gradual improvement overall from December 2018, starting at 0.87, and generally rising through to 2024, peaking at 2.11 in the first quarter of 2025. This indicates an increasing ability of the company to cover its short-term liabilities with current assets over the period. Notable increases occurred around late 2020 (1.29 to 1.46), early 2022 (1.44 to 1.46), and a sharp rise in early 2024 reaching above 2.0. However, the ratio declines substantially in the latest quarter (June 2025) to 0.92, which could merit further investigation concerning liquidity management or changes in working capital.

Quick Ratio

The quick ratio follows a pattern similar to the current ratio, indicating improvements in liquid assets excluding inventory. Starting at 0.76 in December 2018, it shows a steady increase with peaks at 1.43 in late 2023 and 1.92 in early 2024, reflecting stronger immediate liquidity. This ratio also decreases towards the most recent period, dropping to 0.83 by June 2025. The parallel trends between the quick and current ratios suggest consistent management of receivables and other liquid assets relative to current liabilities, but the recent downturn might imply a reduction in liquid resources.

Cash Ratio

The cash ratio remains the lowest among the three liquidity ratios throughout the periods but shows a gradual upward trend from 0.18 in December 2018 to peaks around 0.56 in early 2025. This ratio indicates the company’s cash and cash equivalents relative to current liabilities. Fluctuations occur, with some dips and rebounds, but the overall increase suggests an improved capacity to meet obligations solely with cash reserves. Nevertheless, a decline to 0.25 in mid-2025 points to a potential decrease in available cash or an increase in liabilities, requiring further scrutiny.

Overall, the liquidity ratios reveal a trend of strengthening short-term financial health up until early 2025, particularly visible in the current and quick ratios. The cash ratio's improvement supports better cash management, although it remains relatively low. The downward shifts in the latest available quarter suggest emerging issues with liquidity that merit attention to ensure sustained financial stability.

Current assets

The current assets display an overall upward trend from December 2018 through mid-2025, beginning at approximately 376 million and reaching a peak near 725 million by March 2025. Notable increases occur around early 2021 and early 2024. However, some periods indicate minor dips or stabilization, such as between December 2021 and December 2022, and again towards the end of 2024. This suggests generally increasing liquidity or asset availability over time, with occasional fluctuations.

Current liabilities

Current liabilities fluctuate over the same timeframe without a clear consistent trend. Starting at approximately 433 million in December 2018, liabilities generally remain around the 400 to 500 million range with some volatility. There is a marked decrease in liabilities from late 2020 through late 2021, reaching a low near 320 million, before rising again through 2023. The last few quarters show a significant spike, particularly in June 2025, where liabilities peak above 770 million, indicating increased short-term obligations.

Current ratio

The current ratio begins below 1 at 0.87 in December 2018, indicating potential short-term liquidity concerns initially. It improves steadily, surpassing 1.0 in late 2019, reflecting an improved ability to cover current liabilities with current assets. The ratio peaks notably at 2.04 in March 2024, signaling very strong short-term liquidity. However, following this high, there is a sharp decline in the latter quarter ending June 2025, dropping back to 0.92, which may indicate potential liquidity pressure or rapid increase in liabilities relative to assets.

Summary

The data reveals a generally positive growth in current assets, while current liabilities show more volatility and a late surge. The current ratio trend indicates an overall enhancement of liquidity position from 2018 to early 2024, although the significant decline at the end of the period poses a risk that merits further investigation. The late surge in liabilities combined with a drop in current ratio could reflect changing operational or financial conditions that could impact short-term financial stability.

The analysis of the quarterly financial data from December 31, 2018, through June 30, 2025, reveals several notable trends concerning liquidity and current liabilities.

Total Quick Assets

The total quick assets exhibit an overall upward trend with some fluctuations. Starting at approximately $327 million in late 2018, quick assets increased steadily, reaching peaks around the end of 2020 and mid-2024, with values exceeding $600 million. However, intermittent declines occurred, notably after December 2021 and towards the end of 2024. Despite these fluctuations, the trend indicates an expansion in liquid assets available to cover short-term obligations over the analyzed period.

Current Liabilities

Current liabilities showed variability, starting at approximately $433 million in late 2018 and experiencing moderate increases and decreases. Significant declines are observed in late 2021, where liabilities dropped to about $322 million, followed by a moderate recovery. A pronounced spike occurs at the last recorded period (June 30, 2025), with liabilities sharply rising to around $771 million, which is the highest in the dataset. Overall, liabilities demonstrate volatility with periods of reduction followed by a substantial surge towards the end of the timeline.

Quick Ratio

The quick ratio, reflecting the relationship between quick assets and current liabilities, shows considerable improvement over the period, signifying enhanced short-term liquidity. Initially, the ratio was below 1.0, indicating quick assets were insufficient to completely cover current liabilities. Following 2019, the ratio rises above 1.0 in several periods, peaking significantly in early 2024 at approximately 1.92. This high point suggests strong liquidity positions where quick assets substantially exceed liabilities. However, towards mid-2025, the ratio declines sharply to 0.83, falling below 1.0 once again, which may indicate emerging liquidity pressure due to the concurrent spike in current liabilities.

In summary, liquid assets generally increased over the period, enhancing the company's capacity to meet short-term obligations. Current liabilities fluctuated but remained comparatively stable until a dramatic increase at the end of the analysis period. The quick ratio’s rise over several years suggests improving liquidity until the most recent quarters, where liquidity appears to be under pressure due to the rapid growth in liabilities combined with a tapering in quick assets.

The analysis of the quarterly financial data reveals several notable trends and fluctuations over the observed periods.

Total Cash Assets

Total cash assets exhibited an overall upward trend from the end of 2018 through most of 2021, increasing from approximately 79 million USD to a peak of around 238 million USD in mid-2021. This growth was followed by a period of volatility where cash assets declined to about 133 million USD by late 2022 and then fluctuated in the range of approximately 137 million USD to 189 million USD through the end of 2025. Notably, there was a sharp increase toward the end of 2024 reaching about 184 million USD, followed by a significant decline to around 147 million USD in early 2025, and a recovery afterwards to near 189 million USD by mid-2025. This pattern suggests periods of aggressive cash management possibly linked to operational or investment activities.

Current Liabilities

Current liabilities display a more variable pattern with several peaks and troughs. Initially, liabilities remained high and somewhat stable from approximately 433 million USD at the end of 2018 to about 490 million USD in late 2019. Subsequently, there was a notable decline from late 2019 through 2020, bottoming out closer to 391 million USD. However, starting from early 2021, current liabilities again spiked sharply, reaching nearly 560 million USD by late 2021. A significant drop occurred in early 2022, with liabilities falling to about 322 million USD, followed by fluctuations around the 330-380 million USD range until the end of 2024. A sudden increase to approximately 771 million USD in mid-2025 stands out as an anomaly or a major operational change. Overall, volatility in current liabilities suggests varying short-term obligations which may reflect changes in working capital management or external financing conditions.

Cash Ratio

The cash ratio, defined as the ratio of cash assets to current liabilities, illustrates an improving liquidity position during several phases. Starting at around 0.18 at the end of 2018, the ratio steadily increased through 2020, peaking near 0.44 by mid-2021. A noticeable jump to about 0.5 occurred at the start of 2022, indicating enhanced ability to cover short-term liabilities with cash. However, this ratio showed some fluctuations afterwards, oscillating mainly between 0.37 and 0.46 through the first quarters of 2024. By mid-2025, the ratio declined sharply to 0.25, coinciding with the spike in current liabilities around the same period. This drop suggests a reduced liquidity buffer in recent times, which may warrant attention regarding short-term financial flexibility.

In summary, the data reflects dynamic financial management with periods of increased liquidity and cash reserves alternating with intervals of heightened current liabilities. The cash ratio improvements through most of the observed duration imply a focus on maintaining cash coverage over obligations, although the late 2024 to mid-2025 period indicates a potential tightening of liquidity. The significant jumps and falls in liabilities and cash assets warrant further investigation to understand their underlying causes and implications for operational and financial strategy.