Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Return on Sales
Return on Investment
Fair Isaac Corp., profitability ratios
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).
An analysis of the profitability ratios reveals a sustained upward trend in operational and net efficiency from 2019 to 2024. The company has consistently expanded its margins across multiple levels of the income statement, reflecting enhanced cost management and increased pricing power.
- Gross Profit Margin
- A consistent and steady increase is observed, with the margin rising from 70.96% in 2019 to 79.73% by 2024. This trajectory indicates a successful reduction in the cost of sales relative to revenue over the six-year period.
- Operating Profit Margin
- Significant expansion occurred in this metric, most notably between 2020 and 2021, when the margin rose from 22.86% to 38.40%. The margin continued to climb, reaching 42.71% in 2024, which suggests a substantial improvement in operational leverage and the management of operating expenses.
- Net Profit Margin
- The net profit margin grew from 16.56% in 2019 to 29.86% in 2024. While a slight contraction occurred in 2022, where the margin dipped to 27.12%, the overall trend remained positive, nearly doubling the bottom-line efficiency over the analyzed timeframe.
- Return on Assets (ROA) and Return on Equity (ROE)
- Return on Assets demonstrated strong and uninterrupted growth, increasing from 13.40% in 2019 to 29.85% in 2024, signaling a marked improvement in the efficiency of asset utilization. Return on Equity showed a positive initial movement from 66.30% in 2019 to 71.41% in 2020, although data for subsequent years is unavailable.
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Gross Profit Margin
Fair Isaac Corp., gross profit margin calculation, comparison to benchmarks
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Gross profit | 1,369,320) | 1,202,504) | 1,075,096) | 984,074) | 933,420) | 823,238) | |
| Revenues | 1,717,526) | 1,513,557) | 1,377,270) | 1,316,536) | 1,294,562) | 1,160,083) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 79.73% | 79.45% | 78.06% | 74.75% | 72.10% | 70.96% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Accenture PLC | 32.61% | 32.34% | 31.99% | 32.38% | — | — | |
| Adobe Inc. | 89.04% | 87.87% | 87.70% | 88.18% | 86.62% | — | |
| AppLovin Corp. | 75.22% | 67.74% | 55.41% | 64.62% | — | — | |
| Cadence Design Systems Inc. | 86.05% | 89.36% | 89.57% | 89.73% | — | — | |
| Datadog Inc. | 80.79% | 80.74% | 79.30% | 77.23% | — | — | |
| International Business Machines Corp. | 56.65% | 55.45% | 54.00% | 54.90% | — | — | |
| Intuit Inc. | 78.72% | 78.13% | 81.09% | 82.53% | — | — | |
| Microsoft Corp. | 69.76% | 68.92% | 68.40% | 68.93% | — | — | |
| Oracle Corp. | 71.41% | 72.85% | 79.08% | 80.59% | — | — | |
| Palantir Technologies Inc. | 80.25% | 80.62% | 78.56% | 77.99% | — | — | |
| Palo Alto Networks Inc. | 74.35% | 72.29% | 68.76% | 70.05% | — | — | |
| Salesforce Inc. | 75.50% | 73.34% | 73.48% | 74.41% | — | — | |
| ServiceNow Inc. | 79.18% | 78.59% | 78.29% | 77.05% | — | — | |
| Synopsys Inc. | 79.68% | 79.08% | 79.07% | 79.50% | 78.44% | — | |
| Workday Inc. | 75.60% | 72.41% | 72.21% | 72.25% | — | — | |
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).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 1,369,320 ÷ 1,717,526 = 79.73%
2 Click competitor name to see calculations.
Fair Isaac Corp. has demonstrated a consistent upward trajectory in both top-line revenue and gross profitability over the six-year period ending September 30, 2024. The sustained growth in gross profit relative to revenue growth indicates a significant improvement in operational efficiency and pricing power.
- Revenue and Gross Profit Growth
- Annual revenues increased from approximately $1.16 billion in 2019 to $1.72 billion in 2024. During the same interval, gross profit grew from $823.2 million to $1.37 billion. Gross profit growth consistently outpaced revenue growth, reflecting a reduction in the cost of sales relative to total income.
- Gross Profit Margin Expansion
- The gross profit margin exhibited a steady climb from 70.96% in 2019 to 79.73% in 2024. The most pronounced expansion occurred between 2020 and 2022, during which the margin rose from 72.10% to 78.06%. In the final two years of the period, the margin showed signs of stabilization, plateauing near the 80% threshold.
- Operational Efficiency and Scalability
- The cumulative expansion of 877 basis points in the gross profit margin over five years suggests a highly scalable business model. The ability to increase revenue while simultaneously expanding the margin indicates that the company has successfully optimized its direct cost structure or shifted its product mix toward higher-margin offerings.
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Operating Profit Margin
Fair Isaac Corp., operating profit margin calculation, comparison to benchmarks
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Operating income | 733,629) | 642,830) | 542,414) | 505,489) | 295,969) | 253,548) | |
| Revenues | 1,717,526) | 1,513,557) | 1,377,270) | 1,316,536) | 1,294,562) | 1,160,083) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 42.71% | 42.47% | 39.38% | 38.40% | 22.86% | 21.86% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Accenture PLC | 14.79% | 13.74% | 15.21% | 15.08% | — | — | |
| Adobe Inc. | 31.35% | 34.26% | 34.64% | 36.76% | 32.93% | — | |
| AppLovin Corp. | 39.78% | 19.74% | -1.70% | 5.37% | — | — | |
| Cadence Design Systems Inc. | 29.10% | 30.59% | 30.15% | 26.07% | — | — | |
| Datadog Inc. | 2.02% | -1.57% | -3.50% | -1.86% | — | — | |
| International Business Machines Corp. | 14.95% | 15.17% | 13.50% | 11.97% | — | — | |
| Intuit Inc. | 22.29% | 21.86% | 20.20% | 25.95% | — | — | |
| Microsoft Corp. | 44.64% | 41.77% | 42.06% | 41.59% | — | — | |
| Oracle Corp. | 28.99% | 26.21% | 25.74% | 37.58% | — | — | |
| Palantir Technologies Inc. | 10.83% | 5.39% | -8.46% | -26.66% | — | — | |
| Palo Alto Networks Inc. | 8.52% | 5.62% | -3.43% | -7.15% | — | — | |
| Salesforce Inc. | 14.38% | 3.29% | 2.07% | 2.14% | — | — | |
| ServiceNow Inc. | 12.42% | 8.49% | 4.90% | 4.36% | — | — | |
| Synopsys Inc. | 22.13% | 21.72% | 22.87% | 17.48% | 16.83% | — | |
| Workday Inc. | 2.52% | -3.57% | -2.27% | -5.76% | — | — | |
| Operating Profit Margin, Sector | |||||||
| Software & Services | 30.48% | 27.37% | 27.20% | 28.02% | — | — | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | 26.46% | 24.34% | 26.23% | 26.58% | — | — | |
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).
1 2024 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × 733,629 ÷ 1,717,526 = 42.71%
2 Click competitor name to see calculations.
The operational performance from 2019 to 2024 exhibits a strong trajectory of growth and significant efficiency improvement. While revenues increased steadily, operating income grew at a substantially accelerated pace, resulting in a marked expansion of the operating profit margin over the five-year period.
- Revenue Growth
- Revenues demonstrated a consistent upward trend, rising from 1,160,083 thousand in 2019 to 1,717,526 thousand in 2024. Growth remained steady through 2022 before accelerating in the final two years of the analyzed period.
- Operating Income Expansion
- Operating income experienced aggressive growth, increasing from 253,548 thousand in 2019 to 733,629 thousand in 2024. A pivotal surge is observed between 2020 and 2021, where operating income increased by approximately 71%, significantly outpacing the growth rate of revenues during the same interval.
- Operating Profit Margin Analysis
- The operating profit margin expanded from 21.86% in 2019 to 42.71% in 2024. A substantial shift in profitability occurred between 2020 and 2021, with the margin jumping from 22.86% to 38.40%. This indicates a significant improvement in operational leverage or a strategic shift toward higher-margin revenue streams. Subsequent years show a continued, albeit more gradual, increase, with the margin peaking at 42.71% in 2024, reflecting sustained efficiency in managing operating expenses relative to top-line growth.
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Net Profit Margin
Fair Isaac Corp., net profit margin calculation, comparison to benchmarks
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 512,811) | 429,375) | 373,541) | 392,084) | 236,411) | 192,124) | |
| Revenues | 1,717,526) | 1,513,557) | 1,377,270) | 1,316,536) | 1,294,562) | 1,160,083) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 29.86% | 28.37% | 27.12% | 29.78% | 18.26% | 16.56% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Accenture PLC | 11.19% | 10.72% | 11.17% | 11.69% | — | — | |
| Adobe Inc. | 25.85% | 27.97% | 27.01% | 30.55% | 40.88% | — | |
| AppLovin Corp. | 33.55% | 10.87% | -6.84% | 1.27% | — | — | |
| Cadence Design Systems Inc. | 22.74% | 25.46% | 23.84% | 23.29% | — | — | |
| Datadog Inc. | 6.85% | 2.28% | -2.99% | -2.02% | — | — | |
| International Business Machines Corp. | 9.60% | 12.13% | 2.71% | 10.01% | — | — | |
| Intuit Inc. | 18.19% | 16.59% | 16.23% | 21.41% | — | — | |
| Microsoft Corp. | 35.96% | 34.15% | 36.69% | 36.45% | — | — | |
| Oracle Corp. | 19.76% | 17.02% | 15.83% | 33.96% | — | — | |
| Palantir Technologies Inc. | 16.13% | 9.43% | -19.61% | -33.75% | — | — | |
| Palo Alto Networks Inc. | 32.11% | 6.38% | -4.85% | -11.72% | — | — | |
| Salesforce Inc. | 11.87% | 0.66% | 5.45% | 19.16% | — | — | |
| ServiceNow Inc. | 12.97% | 19.30% | 4.49% | 3.90% | — | — | |
| Synopsys Inc. | 36.94% | 21.05% | 19.38% | 18.02% | 18.03% | — | |
| Workday Inc. | 19.02% | -5.90% | 0.57% | -6.54% | — | — | |
| Net Profit Margin, Sector | |||||||
| Software & Services | 24.83% | 21.91% | 21.55% | 25.12% | — | — | |
| Net Profit Margin, Industry | |||||||
| Information Technology | 20.48% | 20.24% | 22.27% | 23.48% | — | — | |
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).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 512,811 ÷ 1,717,526 = 29.86%
2 Click competitor name to see calculations.
The organization has demonstrated a significant upward trajectory in overall profitability from 2019 through 2024. This period is characterized by consistent growth in both top-line revenue and bottom-line net income, with net income increasing at a disproportionately faster rate, resulting in substantial margin expansion.
- Net Profit Margin Evolution
- The net profit margin rose from 16.56% in 2019 to 29.86% in 2024. A primary inflection point is observed between 2020 and 2021, where the margin expanded sharply from 18.26% to 29.78%, indicating a substantial increase in operational efficiency or a shift toward higher-margin revenue streams.
- Revenue and Net Income Correlation
- Steady revenue growth was maintained throughout the period, increasing from US$ 1.16 billion in 2019 to US$ 1.72 billion in 2024. Concurrently, net income grew from US$ 192.1 million to US$ 512.8 million. The acceleration of net income relative to revenue growth confirms a strong increase in the company's ability to convert sales into actual profit.
- Profitability Stability and Optimization
- Following the surge in 2021, the net profit margin experienced a minor contraction to 27.12% in 2022 before returning to a growth trend. By September 30, 2024, the margin reached its peak of 29.86%, suggesting that the profitability levels established in 2021 have been stabilized and further optimized over the subsequent three years.
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Return on Equity (ROE)
Fair Isaac Corp., ROE calculation, comparison to benchmarks
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 512,811) | 429,375) | 373,541) | 392,084) | 236,411) | 192,124) | |
| Stockholders’ equity (deficit) | (962,679) | (687,990) | (801,947) | (110,942) | 331,082) | 289,767) | |
| Profitability Ratio | |||||||
| ROE1 | — | — | — | — | 71.41% | 66.30% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Accenture PLC | 25.68% | 26.75% | 31.11% | 30.25% | — | — | |
| Adobe Inc. | 39.42% | 32.86% | 33.85% | 32.59% | 39.66% | — | |
| AppLovin Corp. | 144.96% | 28.39% | -10.13% | 1.66% | — | — | |
| Cadence Design Systems Inc. | 22.58% | 30.58% | 30.93% | 25.39% | — | — | |
| Datadog Inc. | 6.77% | 2.40% | -3.56% | -1.99% | — | — | |
| International Business Machines Corp. | 22.06% | 33.29% | 7.47% | 30.38% | — | — | |
| Intuit Inc. | 16.07% | 13.81% | 12.57% | 20.89% | — | — | |
| Microsoft Corp. | 32.83% | 35.09% | 43.68% | 43.15% | — | — | |
| Oracle Corp. | 120.26% | 792.45% | — | 262.43% | — | — | |
| Palantir Technologies Inc. | 9.24% | 6.04% | -14.57% | -22.71% | — | — | |
| Palo Alto Networks Inc. | 49.86% | 25.15% | -127.14% | -78.63% | — | — | |
| Salesforce Inc. | 6.93% | 0.36% | 2.48% | 9.81% | — | — | |
| ServiceNow Inc. | 14.83% | 22.69% | 6.46% | 6.22% | — | — | |
| Synopsys Inc. | 25.17% | 20.01% | 17.85% | 14.31% | 13.54% | — | |
| Workday Inc. | 17.09% | -6.57% | 0.65% | -8.62% | — | — | |
| ROE, Sector | |||||||
| Software & Services | 28.81% | 28.49% | 30.78% | 35.91% | — | — | |
| ROE, Industry | |||||||
| Information Technology | 28.82% | 31.26% | 38.03% | 41.64% | — | — | |
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).
1 2024 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity (deficit)
= 100 × 512,811 ÷ -962,679 = —
2 Click competitor name to see calculations.
Net income exhibited a consistent upward trajectory over the analyzed six-year period, growing from 192.1 million USD in 2019 to 512.8 million USD in 2024. This represents a substantial increase in absolute profitability, with the most significant year-over-year growth occurring between 2020 and 2021.
- Net Income Trends
- Profitability demonstrated steady growth, nearly tripling over the period. This consistent increase suggests strong operational performance and an expanding capacity to generate earnings.
- Stockholders' Equity Position
- A fundamental shift in the capital structure is observed. Stockholders' equity transitioned from a positive position of 289.8 million USD in 2019 to a significant deficit. This deficit began in 2021 and expanded progressively, reaching 962.7 million USD by September 30, 2024.
- Return on Equity (ROE) Analysis
- Between 2019 and 2020, ROE was exceptionally high, increasing from 66.30% to 71.41%, indicating highly efficient generation of profit relative to shareholders' equity. However, ROE calculations cease after 2020. This omission is a direct result of the equity turning negative; when a stockholders' deficit exists, the traditional ROE metric becomes mathematically distorted and loses its utility as a performance indicator, despite the continued growth in net income.
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Return on Assets (ROA)
Fair Isaac Corp., ROA calculation, comparison to benchmarks
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 512,811) | 429,375) | 373,541) | 392,084) | 236,411) | 192,124) | |
| Total assets | 1,717,884) | 1,575,281) | 1,442,034) | 1,567,776) | 1,606,240) | 1,433,448) | |
| Profitability Ratio | |||||||
| ROA1 | 29.85% | 27.26% | 25.90% | 25.01% | 14.72% | 13.40% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Accenture PLC | 12.99% | 13.41% | 14.55% | 13.68% | — | — | |
| Adobe Inc. | 18.39% | 18.23% | 17.51% | 17.70% | 21.66% | — | |
| AppLovin Corp. | 26.92% | 6.66% | -3.30% | 0.58% | — | — | |
| Cadence Design Systems Inc. | 11.76% | 18.36% | 16.53% | 15.87% | — | — | |
| Datadog Inc. | 3.18% | 1.23% | -1.67% | -0.87% | — | — | |
| International Business Machines Corp. | 4.39% | 5.55% | 1.29% | 4.35% | — | — | |
| Intuit Inc. | 9.22% | 8.58% | 7.45% | 13.29% | — | — | |
| Microsoft Corp. | 17.21% | 17.56% | 19.94% | 18.36% | — | — | |
| Oracle Corp. | 7.42% | 6.33% | 6.15% | 10.48% | — | — | |
| Palantir Technologies Inc. | 7.29% | 4.64% | -10.80% | -16.02% | — | — | |
| Palo Alto Networks Inc. | 12.89% | 3.03% | -2.18% | -4.87% | — | — | |
| Salesforce Inc. | 4.14% | 0.21% | 1.52% | 6.14% | — | — | |
| ServiceNow Inc. | 6.99% | 9.96% | 2.44% | 2.13% | — | — | |
| Synopsys Inc. | 17.31% | 11.90% | 10.45% | 8.66% | 8.27% | — | |
| Workday Inc. | 8.39% | -2.72% | 0.28% | -3.24% | — | — | |
| ROA, Sector | |||||||
| Software & Services | 12.26% | 11.19% | 11.32% | 12.19% | — | — | |
| ROA, Industry | |||||||
| Information Technology | 11.80% | 12.34% | 14.33% | 14.52% | — | — | |
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).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 512,811 ÷ 1,717,884 = 29.85%
2 Click competitor name to see calculations.
A consistent upward trajectory in profitability and asset utilization efficiency is evident from 2019 to 2024. The most prominent characteristic of this period is the significant expansion of net income relative to a comparatively stable asset base, resulting in a substantial improvement in overall operational efficiency.
- Net Income Growth
- Net income demonstrated strong growth, rising from 192,124 thousand US dollars in 2019 to 512,811 thousand US dollars by 2024. Despite a minor contraction in 2022, the overall trend reflects a substantial increase in bottom-line earnings, with the 2024 figure representing more than double the income recorded in 2019.
- Asset Base Management
- Total assets exhibited moderate fluctuations throughout the period, moving from 1,433,448 thousand US dollars in 2019 to 1,717,884 thousand US dollars in 2024. The lack of aggressive asset expansion indicates that earnings growth has not been driven by a proportional increase in the asset base, suggesting a shift toward a more asset-light or higher-yielding operational model.
- Return on Assets (ROA) Acceleration
- ROA showed a continuous and accelerating increase, growing from 13.40% in 2019 to 29.85% in 2024. A significant inflection point is observed between 2020 and 2021, where ROA rose sharply from 14.72% to 25.01%. This trend continued steadily over the subsequent years, indicating a marked improvement in the ability to generate profit per unit of asset.
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