Fair Isaac Corp. (NYSE:FICO) 

The analysis of the financial ratios over the periods from 2019 to 2024 reveals several notable trends. The net fixed asset turnover ratio experienced significant fluctuations. Starting at 21.88 in 2019, it rose steadily to reach a peak of 138.02 in 2023, followed by a sharp decrease to 44.65 in 2024. This indicates a variable efficiency in utilizing fixed assets to generate revenue, with a particularly strong performance in 2023 before a reversion in the subsequent year.

When including the operating lease, right-of-use assets, the net fixed asset turnover ratio shows a different pattern. It started at 21.88 in 2019 but dropped significantly to 12.44 in 2020. Thereafter, it increased gradually year by year, reaching 41.28 in 2023 before declining to 25.24 in 2024. This suggests that the inclusion of leased assets moderates the apparent asset efficiency, reflecting the impact of leasing activities on asset utilization metrics.

The total asset turnover ratio demonstrates a steady and consistent increase throughout the observed periods. Beginning at 0.81 in both 2019 and 2020, it edged up to 0.84 in 2021, then improved to 0.96 in 2022 and 2023, and finally reached 1 in 2024. This upward trend implies a gradual enhancement in the company's ability to generate sales from its overall asset base, indicating improving operational efficiency.

Data on equity turnover is incomplete, with values available only for 2019 and 2020, showing a slight decline from 4 to 3.91. The absence of further data restricts the ability to assess longer-term trends in equity utilization.

Net fixed asset turnover:

Marked by substantial volatility, it suggests fluctuating efficiency in fixed asset usage with a pronounced peak in 2023.

Net fixed asset turnover (including operating lease assets):

Displays a moderated and more gradual increase, highlighting the influence of operating leases on asset efficiency metrics.

Total asset turnover:

Shows a consistent, moderate improvement indicative of better utilization of total assets over time.

Equity turnover:

Recorded only for two years, displaying a minor decline but insufficient data for a trend assessment.

Revenues

Revenues exhibited a consistent upward trend throughout the periods analyzed. Starting at approximately 1.16 billion US dollars in 2019, the revenues increased each year, reaching around 1.72 billion US dollars by 2024. The growth appears to accelerate particularly after 2022, where the increase from 2022 to 2023 and then to 2024 shows relatively stronger increments compared to previous years.

Property and Equipment, Net

The net value of property and equipment decreased significantly from 53.0 million US dollars in 2019 to a low point around 11.0 million US dollars in 2023. However, in 2024, a notable recovery occurred, with the value increasing to approximately 38.5 million US dollars. This pattern indicates a substantial asset reduction over several years, followed by a partial restoration in the most recent period.

Net Fixed Asset Turnover

The net fixed asset turnover ratio increased dramatically from 21.88 in 2019 to 138.02 in 2023, indicating a rising efficiency in using fixed assets to generate revenues. This increase aligns with the decline in property and equipment values, suggesting that the company generated more revenue per unit of fixed assets as the asset base shrank. In 2024, however, the ratio decreased sharply to 44.65, corresponding with the increase in fixed assets that year, reflecting a normalization or rebalancing after the prior years’ trend.

Revenues

Revenues exhibited a consistent upward trend over the six-year period, increasing from approximately $1,160 million in 2019 to about $1,718 million in 2024. This represents a substantial growth, with the most pronounced year-over-year increase occurring between 2022 and 2023. The steady revenue growth indicates strong market demand and effective sales performance throughout the period.

Property and equipment, net (including operating lease, right-of-use asset)

The net value of property and equipment showed considerable fluctuation. After a significant increase from approximately $53 million in 2019 to around $104 million in 2020, the asset base declined sharply over the next three years, reaching a low of roughly $36.7 million in 2023. There was a partial recovery in 2024, with the value rising to about $68 million. These variations suggest periods of asset disposal or depreciation followed by reinvestment or acquisition of new assets.

Net fixed asset turnover (including operating lease, right-of-use asset)

This ratio, which measures revenue generated per unit of net fixed assets, showed notable volatility. It decreased markedly from 21.88 in 2019 to 12.44 in 2020, possibly reflecting the significant asset increase in 2020 not yet fully leveraged for revenue growth. Subsequently, the ratio improved, peaking at 41.28 in 2023, indicating an efficient use of fixed assets in generating revenue during that year. However, there was a decline to 25.24 in 2024, though the turnover remained higher than the earlier years excluding 2023. This pattern suggests fluctuating asset utilization efficiency aligned with changes in asset base and revenue.

Revenues

Revenues exhibit a consistent upward trend over the six-year period, increasing from approximately 1,160,083 thousand US dollars in 2019 to 1,717,526 thousand US dollars in 2024. Notably, the growth accelerates from 2022 onwards, with the revenue increase between 2022 and 2023 and continuing to 2024 being more pronounced compared to earlier years.

Total Assets

Total assets have generally increased over the years, starting at 1,433,448 thousand US dollars in 2019 and reaching 1,717,884 thousand US dollars in 2024. While there is some fluctuation, such as a peak in 2020 followed by a decrease in 2022, the overall trend is positive. The 2022 dip followed by a steady rise through 2024 suggests a period of asset optimization or adjustment before growth resumes.

Total Asset Turnover

The total asset turnover ratio demonstrates improving efficiency in asset utilization. The ratio remains stable at 0.81 in 2019 and 2020, then shows steady improvement thereafter, reaching 1.00 by 2024. This indicates that the company has increasingly generated more revenue per unit of assets over time, achieving maximum observed efficiency in the latest period.

The financial data over the six-year period reveals several key trends concerning revenues, stockholders’ equity, and equity turnover.

Revenues

Revenues show a consistent upward trajectory from September 30, 2019, through September 30, 2024. Starting at $1,160,083 thousand in 2019, revenues increased each year, reaching $1,717,526 thousand by 2024. This represents a notable growth trend, with the average annual increase sustaining a positive momentum, indicating effective growth strategies and market expansion during this timeframe.

Stockholders’ Equity (Deficit)

The stockholders’ equity presents a contrasting trend with an initial value of $289,767 thousand in 2019 that increased to $331,082 thousand in 2020. However, starting in 2021, equity moves into negative territory, declining sharply to -$110,942 thousand and continuing to deteriorate over the subsequent years. As of 2024, the deficit is at -$962,679 thousand. This significant and persistent decline after 2020 suggests deteriorating net asset value and potential financial distress, warranting further investigation into liabilities, asset write-downs, or other negative financial events impacting equity.

Equity Turnover

Data for equity turnover is only available for 2019 and 2020, showing a slight decrease from 4.00 to 3.91. The absence of later data precludes conclusions about the trend beyond 2020; however, the declining equity turnover ratio in the observed period may hint at decreasing efficiency in generating revenues from equity before the equity turned negative.

In summary, while the company exhibits strong revenue growth across the six years, the stockholders’ equity plunges into deep deficits starting in 2021, signaling potential financial stability concerns. The negative equity trend contrasts sharply with revenue increases, suggesting that the company might be financing growth through increased liabilities or facing significant losses that erode equity despite growing sales. Monitoring future equity turnover data would be important to understand operational efficiency in relation to equity changes.