Fair Isaac Stumbles: A Beat, a Price Hike, and Trouble in the Air

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The city was hot and mean—the kind of Thursday that makes the ticker tape curl up on itself in resignation. By 2:10 p.m. Eastern, Fair Isaac (they call her FICO in the clubs and the newswires) had bled 9.3%, the kind of drop that unbuttons collars and raises pulses for the wrong reasons. Hard to tell if it was the earnings report, or just gravity doing overtime.

On paper, FICO strutted into the quarter like a gumshoe with a fresh lead. Beating what the street had chalked on the sidewalk. The numbers looked healthy—too healthy, maybe. The beat was loud, but under it, there was a nervous fidget, a sense that something wasn’t going to stick. Some folks in the smoke-filled backrooms figured it was all built on last year’s big, brash price hikes. You jack up the rates and the numbers balloon. The trick is, once you’ve picked the pockets, you run out of marks.

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A Beat Without the Music, and Shadows Lurking Ahead

What did the tape really say? FICO’s second quarter flashed 19.8% revenue growth, landing at $536.4 million. Their adjusted non-GAAP earnings per share, well, that number took a long drag and exhaled 37.1% growth at $8.57. Not bad, if numbers were scotch and could soothe your nerves.

The business splits two-ways—Scores makes up most of the action, with Software trailing behind like a stoic sidekick. Scores surged 34%. Software limped ahead, 3%. The management boys tried to raise the bar—not on revenue, just on earnings—nudging the annual guidance up to $29.15 per share, as if pouring a drink just for show.

So why did the street toss FICO out with the morning trash? Guessing is easy if you’ve been around. They beefed up earnings guidance, sure, but left revenue sitting in the cold. No invite to the party. That’s odd, especially after beating the numbers for the quarter. And then there’s the matter of Scores—the whole caboodle puffed up by a November shakedown, a price jump north of 41% for a FICO score in the mortgage game. Mortgages aren’t the whole pie, but they’re a greasy enough slice.

The question leans in the doorway, casting a long shadow—can FICO keep running after the sugar high? Or is that 34% going to come down harder than a bad debt?

High Valuation, Tight Scrutiny, and Thin Air

FICO’s score is small change in the mortgage world, but don’t try telling that to Bill Pulte over at the Federal Housing Finance Agency. He’s been making noise about price hikes and the way they play with GSE agency-backed mortgages. Reminds me of a double-cross—everyone’s got a motive, but the game’s too twisted to call.

So, will FICO keep turning the screws, or has the fed put them on a short leash? When a stock trades at 48 times this year’s adjusted earnings, you’d better not blink. Sometimes the numbers are just smoke curling through the neon haze—and even the smartest cats know when to keep their hands in their pockets and wait for the fog to clear.

The night is young, the air thick, and the story isn’t over. Not by a long shot. 🕵️

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2025-07-31 23:05