FICO · Q1 2026 Earnings
BullishFair Isaac
Reported January 28, 2026
30-second summary
Q1 revenue of $512M grew 16% YoY with non-GAAP EPS of $7.33 and free cash flow of $165M, paced at 19.2% of the reaffirmed FY26 non-GAAP EPS guide of $38.17. The story is platform ARR accelerating to 33% (from 16% last quarter) — answering last quarter's most important watch item decisively — while Scores +29% (B2B +36%) continues to carry the print. Management said it is "well positioned to exceed our fiscal year guidance" while leaving the $2.35B / +18% YoY FY26 revenue guide untouched, which means a Q2 raise is the base case if platform momentum holds.
Headline numbers
EPS
Q1 FY2026
$7.33
Revenue
Q1 FY2026
$0.51B
+16.0% YoY
Gross margin
Q1 FY2026
83.0%
Free cash flow
Q1 FY2026
$0.17B
Operating margin
Q1 FY2026
45.7%
Key financials
Q1 FY2026| Metric | Q1 FY2026 | YoY | Q4 FY2025 | QoQ |
|---|---|---|---|---|
| Revenue | $0.51B | +16.0% | $0.52B | -0.8% |
| EPS | $7.33 | — | $7.74 | -5.3% |
| Gross margin | 83.0% | — | 82.3% | +66bps |
| Operating margin | 45.7% | — | 45.9% | -18bps |
| Free cash flow | $0.17B | — | $0.21B | -21.8% |
Guidance
Company reaffirms full-year FY2026 guidance across all metrics (revenue $2.35B, GAAP EPS $33.47, Non-GAAP EPS $38.17) with confidence tone; no Q2 guidance provided.
Guidance is issued for both next quarter and the full year. Both may appear below.
Reaffirmed unchanged this quarter: Revenue ($2.35 billion), GAAP EPS ($33.47), Non-GAAP EPS ($38.17), GAAP Net Income ($795 million), Non-GAAP Net Income ($907 million)
Segment performance
Q1 FY2026| Segment | Q1 FY2026 | YoY |
|---|---|---|
| Scores | $0.305B | +29.0% |
| Software | $0.208B | +2.0% |
Platform metrics
Q1 FY2026| Segment | Q1 FY2026 |
|---|---|
| Software Annual Recurring Revenue (ARR) | up 5% YoY |
| Platform ARR Growth | 33% |
| Non-Platform ARR Growth | -8% |
| Software Dollar-Based Net Retention Rate | 103% |
| Platform Software Net Retention Rate | 122% |
| Non-Platform Software Net Retention Rate | 91% |
Profitability
Q1 FY2026| Segment | Q1 FY2026 |
|---|---|
| Operating Cash Flow | $174.1 million |
| Operating Margin | 45.72% |
Management tone
Narrative arc: Q3 FY25 Score 10T regulatory victory → Q4 FY25 Direct License Program offense → Q1 FY26 platform ARR acceleration validates the software thesis
Two quarters ago platform ARR was decelerating (Q3 FY25: +18%, Q4 FY25: +16%), and management's "20%+ aspiration" looked like wishful framing as software revenue stayed flat. This quarter platform ARR jumped to +33% with NRR at 122%, and management's language pivoted accordingly: "Our strong bookings in recent quarters gives us increased confidence that our ARR growth will continue to accelerate in FY26." The shift from aspiration to acceleration narrative — with quantitative validation in the same quarter — is the cleanest tone inflection in a year.
The platform business is now being framed as scaled, not emerging. Last quarter management cited the AI infrastructure / Forrester-leader narrative to explain why platform deserved patience. This quarter the language is "We now have over 150 customers on FICO Platform, with more than half leveraging FICO Platform for multiple use cases." This is operating-model language, not strategic-positioning language — management is showing the cross-sell math rather than asking investors to trust it.
Mortgage originations were treated as a cyclical tailwind in Q4. This quarter, with +60% YoY growth and 42% of Scores revenue, management is reframing mortgage as a structural pillar with pricing power. The honest read from the JPMorgan exchange tempers this: management acknowledged volume improvements across mortgage, auto, and card are "primarily macro-driven" with "modest" innovation contribution. The framing is bullish but the attribution is candid.
Guidance posture is the most overtly forward-leaning FICO has been in recent history. "Well positioned to exceed our fiscal year guidance" two months into the fiscal year, combined with no Q2 standalone guide, signals management is letting the Q1 print do the talking and reserving optionality for a Q2 raise. This contrasts with the Q4 framing of "additional haircuts" applied to FY26 — the haircuts now look like deliberate sandbagging that the platform print is starting to expose.
Direct License Program timeline language hardened toward evasion. In Q4 management committed to "two quarters" of better visibility. This quarter the Ashish Sabhadra exchange got "I wish I could help you" and vague reassurances about "seamless" go-live — no concrete dates for the five resellers in "advanced implementation." Confidence in the program is intact; confidence in the timing is not.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Jeff Mueller · Baird
Asked about education on FICO vs. Vantage score differences and key barriers to switching if LLPA grids reach parity; also clarified timing of FICO 10-T availability for conforming vs. non-conforming markets.
Management stated FICO and Vantage scores differ by more than 20 points 30% of the time, requiring separate LLPA grids and systems. Acknowledged gaming/adverse selection problems and potential securitization market objections. Clarified that FICO 10-T for direct licensing is distinct from FICO 10-T data availability to the market.
Manav Patnaik · Barclays
Asked about significance of recent press release on loan pass, data sharing, and backtesting for FICO 10-T; timing of official approval and general availability; and adoption status of performance model.
Management stated agencies are still testing FICO 10-T with no published timeline for general availability. Performance model is planned for direct license program only with strong interest; noted high engagement on non-conforming side.
Ashish Sabhadra · RBC
Asked for timelines on when five resellers would go live with direct license program; timing for performance model communication to mortgage brokers; and whether revenue model is agnostic between performance and per-score pricing.
Management declined to provide specific timelines but confirmed integration testing underway and go-live will be seamless. Noted performance model is optional and revenue model is relatively agnostic to adoption. Emphasized no brokers being forced to use performance model.
Faiza Ali · Deutsche Bank
Asked whether LLPA grids are needed for FICO 10-T or if conforming market could accept it without grids; whether FICO 10-T and Vantage grids would be released simultaneously or in stages.
Management indicated LLPA grid adjustments likely for FICO 10-T despite its similarity to Classic. Noted industry preference for simultaneous release of both FICO 10-T and Vantage grids but stated FHFA decision timing is unknown. Referenced letter from 35 economists/think tanks supporting simultaneous release.
Alexander Hess · JPMorgan
Asked about positive volume trends across three underwriting lines and extent to which improvement is macro-driven vs. innovation-driven; requested comment on platform feature/use case drivers of momentum and FICO 10-T predictive power on prepayments.
Management characterized recent volume increases as modest (not declines but not strong growth) and primarily macro-driven with modest innovation contribution. Noted platform customers increasingly discovering new use cases beyond traditional risk decisioning once implementation completes. Confirmed FICO 10-T will improve prepayment predictability since credit defaults and prepayments are related.
Answers to last quarter's watch list
What to watch into next quarter
Q2 FY26 guidance action. Management's "well positioned to exceed our fiscal year guidance" language paired with no Q2 standalone guide sets up a Q2 raise as the base case. If FY26 revenue is not raised at the Q2 print despite continued platform momentum, that's a meaningful tonal reversal.
Platform ARR holding above 25% YoY. The jump from +16% to +33% is the strongest signal in the print, but a single quarter of acceleration requires confirmation. If Q2 platform ARR decelerates back below 25%, the bookings-driven acceleration thesis weakens.
Non-platform ARR floor. Non-platform ARR deteriorated from -2% to -8%, with NRR dropping from 97% to 91%. Watch whether this stabilizes or continues to worsen — at current trajectory, non-platform is detracting more from blended software growth each quarter.
First disclosure of Direct License reseller go-lives and/or FICO 10-T revenue. Management has now declined timeline specifics for two consecutive quarters. The first concrete go-live date or 10-T revenue figure will be a step-change disclosure; absence of either in Q2 starts to look like inability rather than discretion.
Mortgage concentration sensitivity. Mortgage originations are now 42% of Scores revenue and grew +60% YoY on macro tailwinds management explicitly attributed to rates. A rate reversal or origination volume slowdown would expose how much of the +29% Scores print is structural pricing power vs. cyclical volume.
Sources
- FICO Q1 FY2026 press release, filed 2026-01-28 (SEC EDGAR exhibit 99.1)
- FICO Q1 FY2026 earnings call Q&A (analyst exchanges)
- FICO Q4 FY2025 and Q3 FY2025 briefs and watch lists (Tapebrief internal)
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