Fair Isaac Corp. (NYSE:FICO)

The receivables turnover ratio exhibits moderate fluctuations over the periods analyzed, generally ranging between approximately 3.8 and 5.1. An initial increase is observed towards early 2021, peaking around 5.1, followed by a general declining trend until late 2023, and then a slight recovery into early 2025. This indicates variations in the efficiency with which receivables are collected, with periods of improved collections alternating with slower turnovers.

The payables turnover ratio shows more pronounced variability, with values spanning from around 10.83 up to a high of 22.82. Early periods witness relatively lower turnover, followed by a peak near the end of 2022. Subsequent quarters reflect a decline returning toward middle-teens ratios. The corresponding average payables payment period reflects inverse movements, with days payable decreasing as turnover increases, suggesting periods where obligations were settled more rapidly.

Working capital turnover is notably volatile, with a striking spike observed around mid-2019 reaching 318.71, which appears to be an outlier compared to surrounding data points typically below 30. Aside from this anomaly, working capital turnover remains generally low and inconsistent, often fluctuating between approximately 4.8 and 25.98. Such variability may reflect changes in operational efficiency or shifts in current asset and liability management.

The average receivables collection period generally aligns inversely with the receivables turnover ratio. It varies roughly between 72 and 107 days, with lower days corresponding to higher turnover ratios. Periods of improved collection efficiency are evident in early 2021 and mid-2025, while longer collection periods occur in late 2023 and early 2024, indicating occasional slowdowns in receivables conversion to cash.

Likewise, average payables payment periods vary less widely, typically between 16 and 34 days, reflecting a relatively stable approach to settling obligations. Notably, shorter payment periods coincide with peaks in payables turnover, confirming faster payables processing during those times.

Overall, the data indicate periodic fluctuations in key efficiency ratios and working capital management metrics. Receivables collection timing and turnover exhibit moderate cyclical behavior, while payables show more pronounced swings, possibly influenced by strategic payment timing. The exceptional spike in working capital turnover suggests an isolated event rather than a persistent trend. Continuous monitoring of these metrics is warranted to identify any emerging patterns in operational effectiveness.

Receivables Turnover

Moderate fluctuations with a peak around early 2021 and a slight decline thereafter, with some recovery observed by early 2025.

Payables Turnover

Marked variability with a peak near late 2022, accompanied by corresponding changes in payment periods indicating variable payment speeds.

Working Capital Turnover

High volatility with an outlier spike in mid-2019; generally maintains low and inconsistent values over time.

Average Receivable Collection Period

Ranges between 72 and 107 days, inversely related to receivables turnover; signs of efficiency gains and slowdowns are present in different intervals.

Average Payables Payment Period

Relatively stable between 16 and 34 days, with shorter periods corresponding to higher payables turnover, denoting efficient payment cycles.

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

Revenues

Revenues generally exhibit a rising trend from the end of 2018 through mid-2025. Starting at approximately $262 million at the end of 2018, revenues reached peaks above $530 million in mid-2025. While some quarterly fluctuations are present, the overall trajectory is upward, indicating growth in the company's sales or service income over time. Notable increases occurred especially from late 2022 to mid-2025, demonstrating amplified business activity or successful operational expansions during this time.

Accounts Receivable, Net

The net accounts receivable show some volatility but follow a broadly increasing trend consistent with rising revenues. Beginning near $248 million in late 2018, the figure oscillates with peaks and troughs but ultimately climbs to over $490 million by mid-2025. Sharp increases are observed particularly in periods corresponding with some of the higher revenue quarters, such as late 2024 and early 2025, which may reflect higher outstanding customer balances or extended payment terms coinciding with larger sales volumes.

Receivables Turnover Ratio

The receivables turnover ratio, which measures how efficiently the company collects its receivables, generally remains within a range of approximately 3.4 to 5.1 times per year throughout the observed periods. Initially missing data for early periods, the ratio begins around 3.9 in mid-2019 and peaks at 5.1 in late 2021. Subsequently, it fluctuates with some periods showing declines to around 3.4 and later recoveries to near 5.0. The variation suggests periods of changes in collection efficiency or credit policy adjustments. A higher turnover ratio generally reflects more efficient receivables collection, while lower values may indicate slower collections or relaxed credit terms.

In summary, the data demonstrate consistent revenue growth accompanied by rising accounts receivable balances, indicating expansion in business volume. The receivables turnover ratio's fluctuations suggest variable effectiveness in collecting outstanding receivables, which may warrant attention to maintain or improve cash flow efficiency amidst increasing sales.

The analysis of the quarterly financial data reveals several key patterns and trends related to cost of revenues, accounts payable, and payables turnover over the observed periods.

Cost of Revenues

The cost of revenues displayed fluctuations across the quarters from December 2018 to June 2025. Initially, there was a general upward trend from approximately 76,066 thousand US dollars at the end of 2018 to a peak near 93,676 thousand in the third quarter of 2020. Following this peak, a downward adjustment is evident through late 2021, reaching a low around 69,203 thousand at year-end 2021. From early 2022 onward, costs exhibited a recovery phase and moderate volatility, with values oscillating between approximately 71,846 thousand and 87,574 thousand, ending slightly lower than the previous peaks by mid-2025. This pattern suggests periods of increasing operational costs, possibly aligned with business expansion or inflationary effects, followed by cost controls or efficiency improvements, and then stabilization with moderate volatility.

Accounts Payable

Accounts payable fluctuated considerably across the examined quarters. Starting around 20,387 thousand US dollars at the end of 2018, there was an observable dip in early 2019, followed by intermittent increases, notably reaching a notable peak of approximately 32,474 thousand in December 2019. Thereafter, payable values declined again and remained more stable through 2020 and 2021, generally within the 16,000 to 23,000 thousand range. From early 2022 to mid-2025, accounts payable tended to increase gradually, culminating near 29,336 thousand in the quarter ending June 2025. The variations may reflect shifts in payment policies, supplier negotiations, or timing of expenses.

Payables Turnover

Payables turnover ratios were only intermittently reported, starting from the third quarter of 2019. Initial values exhibit substantial variability, ranging from 10.83 to 18.22, suggesting fluctuations in the frequency with which the company settled its payables relative to purchases. From 2020 through 2023, the ratio generally spanned a range between approximately 14 and 22, peaking notably at 22.82 in the third quarter of 2023, indicating a period of more rapid payable turnover. Toward the end of the period examined, there was a decline in turnover ratio to 12 by mid-2025, possibly indicating slower payments or changes in credit terms. The overall trend suggests the company experienced varying liquidity and payment pace dynamics.

In summary, the cost of revenues and accounts payable both experienced volatility with phases of increase and decrease, reflective of operational and financial management adjustments. The payables turnover ratio's variability further underscores dynamic payment practices and cash management efforts over the period.

The financial data reveals several notable trends in working capital, revenues, and working capital turnover ratios over the time periods presented.

Working Capital

Working capital exhibits considerable volatility across the quarters. Initially, it starts with negative values from December 2018 to June 2019, indicating a possible liquidity constraint during this period. A significant positive shift occurs in December 2019, with working capital moving into positive territory and continuing to show a strong upward trend through September 2020, peaking at 119,567 thousand US dollars. After a brief decline around March to September 2021, a remarkable surge is observed again in December 2021 and through the 2022 fiscal year, reaching another peak in June 2024. Notably, the last quarter recorded (June 2025) shows a sharp decline back to a negative working capital value (-60,764 thousand US dollars), which could imply emerging liquidity pressures or changes in asset-liability management.

Revenues

Revenues demonstrate a generally upward trajectory over the entire span. Starting from 262,256 thousand US dollars in December 2018, revenue steadily increases with some fluctuations but maintains a positive growth pattern. Despite some quarters with slight dips (e.g., September 2019, December 2021), the overall trend remains strong upward, culminating in the highest figures in the last two periods reviewed (March 2025 and June 2025), with revenues climbing to 498,735 and 536,415 thousand US dollars respectively. This suggests consistent growth in sales or service income, which is a positive indicator for business expansion and market demand.

Working Capital Turnover

The ratio data for working capital turnover is patchy, with missing values in many early quarters. Where available, the turnover ratio shows extremely high values in certain quarters (e.g., 318.71 in June 2020 and 111.99 in June 2021), which may reflect unusually low working capital relative to revenues or potential data anomalies. More typical values range between approximately 4.82 and 15.25 in later quarters, indicating the company turns over its working capital several times each year. Generally, a decreasing turnover ratio trend can be observed moving into 2024-2025, reflecting a possible increase in working capital relative to revenue or less efficient asset utilization compared to prior periods.

Overall, the data suggests that while revenues have shown sustained growth, working capital management has been more variable, with significant fluctuations possibly impacting operational liquidity. The working capital turnover ratio's variability indicates changes in efficiency or capital structure that warrant further detailed analysis. The sharp decline in working capital in the most recent quarter, despite high revenue levels, could hint at emerging operational challenges or strategic shifts impacting short-term financial health.

Receivables Turnover Ratio

The receivables turnover ratio generally fluctuates over the analyzed periods, starting from 3.9 and reaching a peak of 5.06 before declining again to around 4.25. This indicates variability in how efficiently the company collects its receivables. The highest turnover observed suggests periods of improved collection efficiency, while the subsequent decline points to potential challenges in receivables management.

Average Receivable Collection Period

The average receivable collection period varies between 72 and 107 days, demonstrating significant oscillations across the quarters. Initial periods show a decline in days, indicating improved collection efficiency; however, several spikes are evident, such as the increase to 107 days, which corresponds with a decrease in the receivables turnover ratio. This inverse relationship is consistent with expectations, as higher collection periods relate to lower turnover ratios. The data illustrates periods where customer payments slowed, potentially affecting liquidity.

Relationship Between the Two Metrics

The receivables turnover ratio and the average collection period exhibit an inverse pattern, which is typical for these financial indicators. When turnover increases, the collection period shortens, reflecting more rapid cash inflows from receivables. Conversely, a reduced turnover ratio corresponds with longer collection periods, signaling delayed receivables conversion into cash. These alternating trends point to fluctuations in credit and collection policies or changes in customer payment behaviors throughout the evaluated timeline.

Overall Trends and Insights

Overall, the company experiences variable efficiency in managing accounts receivable, with periods of strong performance interspersed with phases of reduced efficiency. Such variability could be influenced by external economic conditions, shifts in customer base payment terms, or internal operational adjustments. Maintaining a stable and low average collection period alongside a high receivables turnover ratio would be favorable for improving cash flow stability. Monitoring these trends closely can aid in identifying the underlying causes and implementing measures to enhance receivables management going forward.

Payables Turnover

The payables turnover ratio exhibited fluctuations over the observed periods. Starting from a ratio of 14.57 at the end of 2019, it decreased to 10.83 in the first quarter of 2020, indicating slower payment to suppliers during that period. Subsequently, the ratio increased steadily, peaking at 18.38 in the first quarter of 2023, suggesting an acceleration in the rate at which the company was paying off its payables. After this peak, there was a decline, with the ratio dropping to 12 by the second quarter of 2025. The trend shows periods of both acceleration and deceleration in payment turnover, with notable variability especially in recent quarters.

Average Payables Payment Period

The average number of days taken to pay payables demonstrated an inverse pattern compared to the payables turnover ratio. Initially at 25 days at the end of 2019, it increased to a maximum of 34 days in the first quarter of 2020, indicating a lengthening payment cycle. Afterwards, the period shortened consistently, reaching a low of 16 days by the fourth quarter of 2022, reflecting more prompt payments. Following this low point, the payment period oscillated moderately around the low twenties, before increasing again to 30 days by the second quarter of 2025. This pattern aligns inversely with the payables turnover ratio, as expected, highlighting changes in payment behavior over time.

Overall Insights

The data reflect shifting payment practices, with an initial extension in payment terms around early 2020, possibly due to external factors affecting cash flow management. Following this, a trend towards quicker settlements is visible until late 2022, after which payment periods lengthen again gradually. Such fluctuations suggest adaptive financial management in response to varying operational or market conditions. The correlation between the payables turnover ratio and average payment period confirms consistent inverse relationships, supporting the reliability of the data. Monitoring these metrics over time provides insight into the company's liquidity management and supplier relations.