(Automated translation by Reuters, please see disclaimer
FICO FICO.N reported better-than-expected fourth-quarter profit on Wednesday, driven by strong demand for its credit reporting products.
Analysts expect demand for loans to increase as the U.S. Federal Reserve lowers borrowing costs through 2025, benefiting companies like FICO that rely on lenders to assess customer creditworthiness before approving loans.
Rising defaults have also led banks to tighten their lending criteria, leading to stricter customer checks.
The company reported adjusted earnings of $163.2 million, or $6.54 per share, for the fourth quarter ended September 30. This figure compares to $126.7 million, or $5.01 per share, recorded a year earlier.
Analysts on average expected FICO to earn $6.39 per share, according to estimates compiled by LSEG.
Scores revenue, which includes business-to-business and business-to-consumer solutions, increased to $249.2 million in the fourth quarter from $195.6 million a year earlier.
Software revenue increased 5% to $204.6 million in the quarter. FICO’s revenue increased 16% from the previous year to $453.8 million.
The company is best known for its FICO score, the standard measure of consumer credit risk used by banks, credit card issuers, mortgage lenders and auto loan providers.
Its clients include U.S. banking giant Wells Fargo WFC.N as well as the top 100 credit card issuers in the United States.
FICO forecasts revenue of approximately $1.98 billion for the year 2025, which is in line with analysts’ expectations.
The company forecast adjusted earnings of $28.58 per share for the year, below estimates of $29.80.
