Fair Isaac Corp. (NYSE:FICO)

Gross profit margin

The gross profit margin displayed a generally upward trend over the analyzed periods, beginning at 70.62% and rising gradually to reach 81.75%. Notable incremental gains occurred following December 2020, with the margin consistently improving and stabilizing above 77% from late 2021 onwards, indicating enhanced efficiency in production or service delivery costs relative to revenue.

Operating profit margin

This margin showed significant growth, increasing from 21.43% initially to 45.87% in the last reported period. There was a marked acceleration between early 2021 and late 2021, where the margin rose steeply from 27.35% to 39.68%, reflecting improved operational management or reduced operating expenses. The stability in higher margins post-2021 suggests strengthened operational leverage or cost controls.

Net profit margin

Net profit margin increased from 17.31% to 32.8% over the course of the periods observed. Despite some fluctuations, particularly around mid-2022, the overall trend was positive with margins improving significantly after 2020 and maintaining levels above 26% from 2021 onward. This points to effective bottom-line improvements and possibly favorable tax and interest expense management.

Return on equity (ROE)

The return on equity exhibited considerable volatility with unusually high and erratic values in the early quarters, peaking at 292.77%. After that, the data is missing for subsequent periods, preventing a continuous trend analysis. The initial volatility could indicate changes in shareholder equity levels or extraordinary financial events impacting profitability relative to equity.

Return on assets (ROA)

The return on assets showed a steady increase from 13.4% to 33.98% over the periods. This improvement suggests enhanced asset utilization and profitability of the company’s asset base. ROA improved consistently, with a slight dip observed around mid-2022 but recovery followed. The trend indicates better management of overall assets to generate earnings.

Revenue Trends

Revenues exhibit a generally upward trend over the entire period, starting at approximately US$298.5 million at the end of 2019 and rising to about US$536.4 million by the end of 2025. Although some quarters show minor fluctuations and slight declines, the overall pattern indicates consistent revenue growth, particularly notable after the first quarter of 2022, where revenues surpass US$350 million and continue rising steadily.

Gross Profit Trends

Gross profit also trends upward, growing from roughly US$207.7 million at the conclusion of 2019 to an estimated US$448.8 million by the end of 2025. Despite some intermittent decreases in certain quarters, gross profit generally increases in line with revenue, indicating effective cost management or improved sales mix. The growth in gross profit is particularly pronounced from early 2023 onwards.

Gross Profit Margin Trends

The gross profit margin displays a clear, steady increase throughout the period. Beginning at about 70.6% at the end of 2019, margins improve consistently, reaching approximately 81.8% by the end of 2025. This gradual increase suggests enhancements in operational efficiency, pricing power, or product mix, enabling the company to retain a larger portion of revenue as gross profit.

Overall Insights

The simultaneous growth in revenues, gross profit, and gross profit margin indicates a strengthening financial position over the observed years. The upward trajectory of gross profit margin implies that improvements in profitability are not solely driven by increased sales volume but also by a favorable cost structure or higher-value product offerings. This combination demonstrates effective management of both top-line and cost elements, positioning the company for sustained profitability growth.

The financial data reveals a consistent growth pattern in the company's operating income and revenues over the observed periods, accompanied by improving operating profit margins, indicating enhanced operational efficiency and profitability.

Operating Income

Operating income exhibited a noticeable upward trend, starting from 51,882 thousand US dollars at the end of 2019 and reaching 262,518 thousand US dollars by mid-2025. There were occasional fluctuations, such as a significant jump in mid-2021 to 194,384 thousand US dollars, and periods of relative stabilization or slight decline, but the overall trajectory was steadily increasing.

Revenues

Revenues followed a similar growth pattern, initially at 298,504 thousand US dollars at the end of 2019 and rising to 536,415 thousand US dollars by the middle of 2025. The revenue figures indicate consistent growth with some variability likely due to seasonal or market factors. The trend reflects a healthy expansion in sales or service volume over time.

Operating Profit Margin

The operating profit margin improved markedly throughout the timeline. Starting at 21.43% at the end of 2019, the margin shows a continuous increase, reaching 45.87% by mid-2025. This increase highlights enhanced profitability relative to revenues and suggests better cost management, pricing power, or operational leverage achieved during the period.

Overall, the data suggests the company has been successful in growing both its top-line revenues and its bottom-line profitability. The consistently rising operating profit margin indicates that the growth in operating income has outpaced revenue growth, reflecting improved efficiency or higher margin business mix. The financial performance showcases a robust and improving operational model over the extended timeframe.

Revenues

The revenue trend exhibits a general upward trajectory across the periods analyzed, starting at approximately 298.5 million US dollars and consistently increasing to exceed 536 million US dollars by the end of the timeline. Notably, revenues experienced some fluctuations, with periods of acceleration such as the rise from December 2021 to March 2022 and subsequent quarters, indicating potential growth in sales or service demand. Although there are minor dips in certain quarters, the overall pattern suggests robust business expansion and increasing market penetration over time.

Net Income

Net income follows a broadly positive trend with significant volatility in absolute terms. Beginning in the range of approximately 54.9 million US dollars, it shows remarkable growth peaks notably in mid-2021, reaching over 151 million US dollars, followed by a decrease and subsequent recovery phases. The fluctuations could indicate periods of varied expense management, operational adjustments, or extraordinary items impacting profitability. Despite these oscillations, the net income progressively rises towards the latest dates, ending near 181.8 million US dollars, reflecting overall profitability enhancement along the timeline.

Net Profit Margin

The net profit margin exhibits a strengthening profitability profile, starting at 17.31% and rising steadily with some volatility to reach 32.8% by the final period. The margin peaked above 29% from late 2020 onward, indicating improved efficiency or better cost control relative to revenues. The data suggests that the company has been able to convert a higher proportion of revenues into net income over time, reflecting enhanced operational leverage or successful strategic initiatives.

Key Insights

Overall, the financial metrics indicate significant growth in revenue accompanied by stronger profitability, as evidenced by the increasing net income and expanding profit margins. The fluctuations in net income against more stable revenue growth imply the presence of episodic factors influencing earnings, which require monitoring for sustainability. The improving net profit margin underscores effective cost management or more profitable revenue streams. These trends collectively point to a financially strengthening position through the periods assessed.

Net Income Trend

The net income demonstrates a general upward trend over the observed periods. From approximately $54.9 million at the end of 2019, it increased steadily with notable spikes during mid-2021, reaching over $151 million in June 2021. Despite some fluctuations, the net income maintained a generally strong position, culminating in a peak of about $181.8 million by June 2025. Temporary declines, such as those observed around late 2021 and early 2023, were followed by recoveries, indicating resilience in profitability.

Stockholders’ Equity Development

Stockholders’ equity shows a contrasting negative trajectory. Initially positive and increasing, peaking at around $331 million by September 2020, it then experienced a dramatic decline starting in early 2021. The equity shifted from a positive to a significant deficit region, reaching negative values exceeding $1.3 billion by June 2025. This sharp deterioration suggests substantial financial challenges or losses impacting the company's net assets over the analyzed timeframe.

Return on Equity (ROE) Analysis

Return on equity exhibited high volatility in the available data points up to March 2021. Starting from approximately 86% at the end of 2019, ROE peaked at nearly 293% in June 2021. However, post this period, ROE data is unavailable, likely due to the stockholders’ equity turning negative, which makes ROE calculation unreliable or meaningless. High ROE values before the equity deficit imply robust profitability relative to equity, although they may also reflect unusual financial circumstances given the equity plunge.

Overall Financial Condition and Insights

The company recorded strong and increasing net income across the analyzed quarters, indicating operational profitability and effective income generation capability. Conversely, the steep and sustained decline in stockholders’ equity into significant deficits raises concerns about liabilities, possibly due to increased debt, dividends, buybacks, or accounting adjustments impacting equity negatively. The inconsistency between rising net income and declining equity suggests complex underlying financial dynamics that warrant further investigation. The absence of ROE data in later periods, compounded by the negative equity, obscures the assessment of shareholder returns post mid-2021. This divergence points to a potential structural or accounting issue affecting balance sheet strength, despite income growth.

The analysis of the quarterly financial performance reveals notable trends in net income, total assets, and return on assets (ROA) over the examined period.

Net Income

The net income exhibits an overall upward trajectory, albeit with some fluctuations across quarters. Starting at approximately 54,921 thousand US dollars, the net income increased steadily through 2020, reaching a peak of 151,198 thousand US dollars in June 2021. Although there were intermittent declines, such as the drop from 151,198 in June 2021 to 85,720 in September 2021, net income generally continued to rise in subsequent quarters, culminating at 181,789 thousand US dollars by December 2025. This indicates strong profitability growth with some volatility during the mid-period.

Total Assets

Total assets showed relative stability with mild fluctuations across the quarters. Beginning with 1,545,038 thousand US dollars at the end of 2019, the assets slightly increased and decreased, reaching a local low around 1,463,310 thousand US dollars at the end of 2021. Subsequently, assets trended upward again with more pronounced growth post-2022, climbing from 1,458,693 thousand US dollars at the end of 2022 to 1,862,023 thousand US dollars by mid-2025. The overall pattern reveals a gradual accumulation of assets despite some short-term decreases.

Return on Assets (ROA)

The ROA metric demonstrates a consistent and significant improvement throughout the period. Starting at 13.4%, ROA increased steadily reaching 23% by mid-2021 and then continued to climb, peaking at 33.98% by the end of 2025. This trend suggests increasing efficiency in generating net income from the asset base, reflecting enhanced profitability and effective asset utilization over time.

In summary, the company shows a pattern of growing profitability and improved asset efficiency. Despite periodic fluctuations in net income and total assets, the overall upward trends are strong. The rising ROA emphasizes efficient management and positive returns on invested assets, supporting a favorable financial outlook.