Good afternoon, and thank you for attending FICO's first quarter earnings call. I'm Dave Singleton, Vice President of Investor Relations, and I'm joined today by our CEO, Will Lansing, and our CFO, Steve Weber.

Today we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison to the prior quarter to facilitate an understanding of the run rate of the business.

Certain statements made in this presentation are forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many risks and uncertainties that could cause actual results to differ materially.

Information concerning these risks and uncertainties is contained in the company's filings with the SEC, particularly in the risk factors and forward-looking statements portions of such filings. Copies are available from the SEC, from the FICO website, or from our Investor Relations team.

This call will also include statements regarding certain non-GAAP financial measures. Please refer to the company's earnings release and Regulation G schedule issued today for reconciliation of each of these non-GAAP financial measures to the most comparable GAAP measure.

The earnings release and Regulation G schedule are available on the Investor Relations page of the company's website at fico.com, or on the SEC's website at sec.gov. A replay of this webcast will be available through January 28th, 2027.

We have refreshed our quarterly investor presentation with additional content, which is available in the Investor Relations section of our website. We will refer to this presentation during today's earnings announcement.

I will now turn the call over to our CEO, Will Lansing.

Thanks, Dave, and thank you, everyone, for joining us for our first quarter earnings call. We had another strong quarter, and are reiterating our fiscal 2026 guidance.

We reported Q1 revenues of $512 million, up 16% over last year, as you can see on page 5 of our investor presentation. For the quarter, we reported $158 million in GAAP net income in the quarter, up 4%, and GAAP earnings of $6.61 per share, up 8% from the prior year.

We reported $176 million in non-GAAP net income, up 22%, and non-GAAP earnings of $7.33 per share, up 27% from the prior year. We delivered free cash flow of $165 million in our first quarter.

Over the last four quarters, we delivered $718 million in free cash flow, an increase of 7% year-over-year. We continued to return capital to our shareholders through buybacks by repurchasing 95,000 shares in Q1 at an average price of $1,707 per share.

At the segment level, on page 6, you can see our first quarter Scores segment revenues were $305 million. That's up 29% versus the prior year.

While B2B Scores were the key driver of growth, we also saw continued growth in B2C Scores. In our Software segment, we delivered $207 million in Q1 revenues.

That's up 2% over last year. Results included 37% platform revenue growth and a 13% decline in non-platform revenue.

Steve will provide additional revenue details later in the call. We had another strong execution quarter in our Scores business, which we highlight on page 8.

The FICO Mortgage Direct Licensing Program allows resellers the ability to streamline score access, enhance price transparency, and provide cost savings to lenders through reduced breakage fees. This quarter, we announced the addition of four new strategic reseller participants to the FICO Mortgage Direct Licensing Program: Zactis, Cotality, Ascend Companies, and CIC Credit.

Additionally, we signed a DLP agreement to add another participant, MeridianLink, a key platform provider to the mortgage industry. We'll be releasing a press release on that soon.

With strong demand from lenders, FICO is actively working alongside participants to support testing. One large reseller is close to completing production integration testing.

Another large reseller has completed that testing and is now testing system integration downstream. While we expect to go live soon with multiple partners, we also continue to work on finalizing agreements with additional reseller participants.

The direct license program currently supports classic FICO. While the conforming market is anticipating the general availability of FICO Score 10 T, we expect FICO Score 10 T to be available for direct licensing in both conforming and non-conforming in the first half of calendar '26.

A high-level overview of the direct license program and FICO Score 10 T can be found on page 9 and 10 of our presentation. FICO Score 10 T is a meaningful step forward in credit risk assessment.

FICO Score 10 T offers significant improvements in predictive accuracy, combined with a focus on fairness and model stability, offering tremendous benefits for lenders, investors, and borrowers compared to other alternatives on the market. In the last year, we have nearly doubled the number of lenders in our FICO Score 10 T adopter program.

These lenders account for more than $377 billion in annual originations and more than $1.6 trillion in eligible servicing volume, most making multi-year commitments to use FICO Score for mortgage decisions in both the conforming and non-conforming markets. This quarter, we also announced a strategic partnership with Plaid to deliver the next generation of UltraFICO Score.

This score combines the proven reliability of the FICO Score with real-time cash flow data from Plaid to provide lenders with a single enhanced credit score that delivers superior consumer risk assessment without operational complexity. The enhanced UltraFICO Score solution is credit bureau-agnostic and will leverage cash flow data, historical and current information about the money flowing into and out of a consumer's transaction accounts—that's checking, savings, money market—accessed through Plaid's open finance network of consumer-permissioned data.

Plaid powers nearly 1 million secure financial connections each day and has helped more than half of Americans with a bank account securely move more of their financial life online. We see growing demand for this score, which will launch for distribution with Plaid in the first half of calendar 2026.

Within the quarter, we continued to expand adoption of FICO Score Mortgage Simulator by partnering with Sharper Lending Solutions, Credit Interlink, and Ascend Partners. Including Zactis and MeridianLink announced in fiscal 2025, five resellers have adopted the simulator, and we're expecting another large reseller to sign shortly.

The FICO Score Mortgage Simulator is the only simulation tool available to mortgage professionals that use the FICO Score algorithm. It enables mortgage professionals to run credit event scenarios by applying mock changes in an applicant's credit report data to simulate potential changes to the applicant's FICO Score.

The FICO Score Mortgage Simulator supports simulations on all three credit bureaus and models potential changes to several FICO Score versions used in mortgage lending. [clears throat] Mortgage professionals can leverage valuable insight from the simulator to help drive smarter decisions that can present more loan options and favorable interest rates for customers.

In our Software business, we're thrilled to be recognized by Gartner as a leader in the January 2026 Gartner Magic Quadrant for Decision Intelligence Platforms. We are positioned the highest for our ability to execute.

We believe this recognition is a landmark moment for FICO. Further, we feel it reflects our commitments to empowering customers and delivering lasting impact worldwide.

As a market leader in decision intelligence, FICO enables businesses to make real-time decisions at scale. The core of our strategy is to empower customers with always-on, real-time customer insights that deliver connected decisions and continuous learning throughout the entire customer life cycle.

Our innovations will be on display at FICO World 2026, which is going to happen May 19th through 22nd in Orlando, Florida. FICO World brings together customers and partners from around the world, allowing participants to collaborate on how FICO Platform makes real-time decisions at scale to optimize interactions with consumers.

At FICO, we're obsessed with powering consumer connections and delivering always-on personalized experiences to drive outsized business outcomes. At FICO World 2026, you can network with the world's leading experts to learn how you can power your organization, apply best practices in advanced platform decisioning, and drive financial inclusion.

I'm going to now hand it over to Steve to provide further financial details.

Thanks, and good afternoon, everyone. As Will mentioned, our Scores segment revenues for the quarter were $305 million, up 29% from the prior year.

As shown on page 13 of our presentation, B2B revenues were up 36%, primarily attributable to higher mortgage originations Scores unit price and an increase of volume in mortgage originations. Our B2C revenues were up 5% versus the prior year, driven mainly by our indirect channel partners.

First quarter mortgage originations revenues were up 60% versus the prior year. Mortgage originations revenues accounted for 51% of B2B revenue and 42% of total Scores revenue.

Auto originations revenues were up 21%, while credit card, personal loan, and other originations revenues were up 10% versus the prior year. For your reference, page 14 of our presentation provides five-quarter trending on all of our Scores metrics.

Turning to our Software segment, our software ACV bookings for the quarter were a record $38 million, as shown on page 15 of the presentation. This quarter included an above-average-sized international multi-use case platform deal.

On a trailing 12-month basis, ACV bookings reached $119 million this quarter, an increase of 36% from the same period last year. Our strong bookings in recent quarters gives us increased confidence that our ARR growth will continue to accelerate in FY '26.

Our total Software ARR, as shown on page 16, was $766 million, a 5% increase over the prior year. Platform ARR was $303 million, representing 40% of our total Q1 '26 ARR.

Platform ARR grew 33% versus the prior year, while non-platform declined 8% to $463 million this quarter. Platform ARR was driven by both new customer wins as well as expanded use cases and volumes from existing customers.

We also migrated our non-platform LiquidCredit solution to the platform. Excluding that LiquidCredit migration, our platform ARR growth was in the high 20% range.

The non-platform year-over-year ARR decline was driven primarily by migrations, the end-of-life of a legacy authentication suite solution, and some usage declines. In our CCS business, ARR growth was relatively flat.

Our dollar-based net retention rate in the quarter was 103%. Platform NRR was 122%, while our non-platform NRR was 91%.

Platform NRR was driven by a combination of new use cases and increased usage of existing use cases. We now have over 150 customers on FICO Platform, with more than half leveraging FICO Platform for multiple use cases.

First quarter Software segment revenues, detailed on page 17, were $207 million, up 2% from the prior year. Within the segment, our SaaS revenues grew 12%, driven by FICO Platform.

Our on-premises revenues declined 12%, primarily driven by lower point-in-time revenues. Year-over-year, our platform revenues grew 37%, and our non-platform revenues declined 13%.

As a reminder, our FY '26 revenue guidance reflects an expectation of lower point-in-time revenues throughout FY '26 due to fewer non-platform license renewal opportunities compared to the prior year. From a regional lens, 88% of total company revenues this quarter were derived from our Americas region, which is a combination of our North America and Latin America regions.

Our EMEA region generated 8% of revenues, and the Asia Pacific region delivered 4%. Operating expenses for the quarter, as shown on page 18, were $278 million this quarter versus $279 million in the prior quarter, which included $10.9 million in restructuring charges.

Excluding restructuring, expenses grew 4% quarter-over-quarter, driven primarily by personnel expenses. We expect operating expense dollars to continue to trend upward modestly throughout the fiscal year.

Our non-GAAP operating margin, as shown on page 19, was 54% for the quarter, compared with 50% in the same quarter last year, which means we delivered year-over-year non-GAAP operating margin expansion of 432 basis points. The effective tax rate for the quarter was 17.5%.

The operating tax rate was 25.7%. The primary difference between operating tax rate and net effective tax rate for the quarter is $15.7 million in excess tax benefit recognized upon the settlement or exercise of employee stock awards.

We continue to expect a full-year net effective tax rate of 24% and an operating tax rate of 25%. At the end of the quarter, we had $218 million in cash and marketable investments.

Our total debt at quarter-end was $3.2 billion, with a weighted average interest rate of 5.22%. As of December 31st, 2025, 87% of our debt was held in senior notes with no term loans.

We had $415 million balance on our revolving line of credit, which is repayable at any time. As Will highlighted, we continued to return capital to our shareholders through buybacks, as shown on page 20.

In Q1, we repurchased 95,000 shares for a total cost of $163 million, and we continue to view share repurchases as an attractive use of cash. With that, I'll turn it back to Will for his closing comments.

Thanks, Steve. We had a great start to the year and are well positioned to exceed our fiscal year guidance.

As in prior years, we will revisit our guidance on our Q2 earnings call. In our Software business, we're seeing growth in bookings and ARR, reflecting the value of our innovation in the market.

Since FICO World 2025, we achieved general availability of FICO Marketplace and FICO focused foundation model. Our next generation FICO Platform and enterprise fraud solution on FICO Platform will soon be generally available.

I'm excited to see our innovation realized in the market and delighting our customers. In our Scores business, our innovations are driving increased engagement from market participants.

There's continued participant adoption of our FICO Mortgage Direct Licensing Program. Outside of conforming mortgages, there's continued adoption for FICO Score 10 T.

We see adoption of FICO Score Mortgage Simulator throughout the mortgage industry. The FICO Score continues to be the trusted industry standard used by 90% of top US lenders as the standard measure of consumer credit risk in the US.

With that, let me turn this over to Dave to open up the Q&A session.

Thanks, Will. This concludes our prepared remarks, and we're now ready to take questions.

Operator, please open the lines.

Thank you. I just wanted to touch on the 10 T again.

That slide you had was really helpful. Right before earnings, you had this press release with LoanPass and the data sharing and the backtesting and stuff that can be done.

I was just hoping you could help us appreciate the significance of that, and any sense of timing around when 10 T officially gets approved and used, etc.?

Thanks, Manav. I think we're continuing to see a lot of adoption on the non-conforming side, and on the conforming side with the agencies, they're still doing a lot of testing.

We don't really have a timeline. They haven't published any kind of a timeline yet.

At this point, we really don't know when it will be generally available.

Okay. Got it.

Then maybe just on the performance model adoption, I was just wondering if you could give us any early signs or based on discussions, how you think that's going. Is that going to be available through the credit bureau channel as well?

The performance model right now is planned for the direct license program, and it's going well. We have a lot of interest, and we're busy working towards bringing the direct channel live.

Okay. Fair enough.

Maybe if I can squeeze one more in, Steve. Just it was a good quarter, you maintained the guide, I know that's practice, but maybe you could just help us appreciate why there was no raise to the guide this time?

Thanks, Manav. It's a good question.

We're pretty confident we're going to be able to beat our guidance. I know we talked about it was pretty conservative last quarter.

At this point, we're only 3 months in. There's just a lot of questions out in the macro environment.

With the Fed today, frankly, we don't probably know what numbers we would move to. I think by next quarter, we'll have a much better idea of what the world looks like and what overall volumes are going to look like.

I think that was our thinking behind that.

Fair enough. Thank you, guys.

Hey, good afternoon, and thanks for taking my questions. I'm curious if you had any sense what the timeline looks like for the release of the LLPA grids, and if you had any insight as to what those might look like?

The short answer to that is no. I don't think anyone knows what the timeline for the LLPA grids looks like.

As we've discussed in the past, there's tremendous challenges with figuring out how to make those work because of the gaming and adverse selection issues. No one knows what the timeline really looks like, certainly we don't.

I think that we have some significant problems that have to be overcome before they can be released.

Got it. That's very helpful.

Then as a follow-up, we've heard, I guess, two concerns from lenders regarding FICO Direct and the performance model. One is that for FICO Direct, there's a concern the resellers, I guess, could improperly calculate the scores and aren't taking, I guess, legal responsibility for it.

I think there's been some hesitancy from lenders. Just curious if you could address that.

Then on the performance model, I believe some lenders are concerned about how the regulators might view passing on that performance fee to the end consumer. Curious if you could comment on those two hang-ups that may be out there.

I think that that's a misplaced, misguided concern. The scores calculated by the resellers in the direct license program will be the same scores that are calculated by the bureaus today.

It's the same algorithm and the same technology to do it, same data is being used. I think that any kind of concern about miscalculation or differences in scores is misplaced.

That said, I can tell you that we are in the midst of making sure that all the testing gives everyone every confidence that that's not an issue. Then in terms of the regulators, they also are looking at it to get comfortable with it, and that's proceeding apace.

Got it. That's very helpful.

Thank you.

Thanks for taking my question. It's good to see that momentum in the direct license program with five resellers signed.

You talked about them being in advanced stages of implementation. I was just wondering if you had some timelines around when they would go live.

Then, at least when we have done checks with brokers, they are not aware of the performance model as yet. When do we start to see that get communicated to the mortgage brokers and the industry in general?

Much better communicated. Thanks.

On timeline, I wish I could help you, I wish that we knew what the timeline was, but this is the mortgage market, and we don't do anything without having everything extremely buttoned up. We are working through all the integration testing and all the downstream impacts, and you can be assured that when it does go live, it'll go live without a hiccup.

We're well on our way. I can't give you a timeline.

No, that's completely understandable.

If we could answer the

second part of the question

Oh, well, and so, first of all, the performance model is optional. Okay?

No one's being forced to take the performance model. Anyone who doesn't like it doesn't have to use it.

They can just pay per score, per unit as they always have. We introduced the performance model as an option to provide more flexibility for some originators, for some lenders who prefer that approach.

People who don't like it, it's a little hard to understand what the problem is. They don't have to use it.

They can just go with a per-unit price.

That's helpful color. Maybe if I can just clarify that your revenue model is agnostic irrespective of whether the customers adopt performance or per score model, is that right?

It's relatively agnostic, yeah. Nothing's ever truly agnostic, but it's set up to basically be relatively agnostic.

That's helpful. Thanks.

Thank you.

Thank you. I'm going to switch over to the Software business.

Some interesting improvements there to think about. Can you maybe talk about the target of the 500 named accounts globally?

You broke that into 350 in financial services, 150 outside. How does this kind of compare to your prior strategy under the Gen 1 platform?

How aggressively do you think you can reach those customers, and how much of this is a push to specifically go outside and expand beyond the financial institutions at this point? Are we kind of entering this phase 2 approach with the Gen 2 platform?

I think we're in the beginning of that phase 2. Look, we are very heavy in financial services, have been historically, will continue to be.

Let's be realistic about this. That said, the platform is very much designed to be horizontal and is highly appealing to other verticals.

We're getting a lot of traction in telco and in other verticals. Further, we're really committed to our partner program, and taking our IP to market through systems integrators and other providers.

I think that's going to be the way we wind up expanding to other verticals. Our marketplace is designed to be able to do that, our next-gen platform is designed to be able to do that.

We're still very interested in broadening our reach, but our direct selling efforts are still primarily focused on financial services.

Got it. Just quickly, how many named accounts do you have right now in financial services?

We don't disclose that.

Sorry, but it's an arbitrary number. We can name any we want.

It's an arbitrary number. What number would you like it to be?

Sure.

It was just an attempt to kind of better understand the new customers you have an approach to. It was just ballpark, but that's

Oh, I understood. Look, I think the general answer to that is there's several hundred to go.

Got it. Okay.

That's helpful. Then as a follow-up here, if we back out kind of the international multi-year deal here, still solid growth in the ARR, but there's also a divergence.

You guys did list the reasons why between platform ARR growth and non-platform. Is the idea that we're beginning to also see customers that ultimately want to move from non-platform to platform, and so we should begin to see a sustained discrepancy in the ARR numbers?

Gradually over time, we're looking to migrate everyone, right? It's a lot more efficient to be on the platform, and we've said that for a long time.

There'll be a lot of efficiencies to be gained from that. We haven't done a lot of that in the past, but we're getting to the point now where we can.

You're going to see more and more of that. You're also seeing just a lot more sales.

Even the big deal we had this quarter had very little ARR impact this quarter, but it will have a much bigger impact next quarter. If you look at the rolling trend of ACV bookings, it's grown dramatically, and we think there's still a lot more that to come this year, and that's going to drive more ARR growth.

We've got a lot of land activity happening, and we've got a lot more expand. If you look at the platform, the net retention rate goes up, they find new use cases, they expand into other areas.

There's just a lot of different areas we can grow in that business.

This is a classic software business problem. We as a provider would love to have everybody on a single codebase.

It'd be really nice and easy to run it that way. Yet, we have more legacy code that's still highly profitable, we have customers who are really committed to using it and want to continue to use it.

We wind up in this position where we have to make proactive decisions about what legacy solutions we're going to continue to support, and which ones we're going to force migration on. The biggest factor in thinking that through is can we provide full features and functionality of the legacy solution on the new platform before we force a change through an end-of-life initiative?

Far, we've been pretty successful with that. Our classic business, our historical legacy business runs just fine and is profitable.

As the new platform, the next-gen platform has the features and functionality that frankly is superior to what you find in the legacy solutions, we're going to see voluntary migration, we'll see some forced migration, and then we'll see some end of life.

Thank you.

Thanks. Good afternoon.

Everyone's obviously awaiting the LLPAs, the market and investors. Any education, process, or caveats you'd volunteer to kind of help investors interpret how to compare the LLPAs under Vantage to FICO?

I'm thinking things like, for the same consumer, what's the delta between FICO and Vantage on average, or anything like that. Then just, I know it's a finger-in-the-air assumption to say that the grids may be at parity, but just remind us, if the grids do appear to be at parity, what do you view as the key barriers to potential switching?

I think it's unlikely the grids will be at parity, but let's hold that one and just talk a little bit about the first part of your question, which is differences in the score. Our research suggests that the FICO Score and the VantageScore are more than 20 points different 30% of the time, in both directions, it's not consistently one directional, which means that it's very, very hard to just substitute one score for another, a VantageScore for a FICO Score.

You really have to have a completely independent, separate system to run a score that just has different odds-to-score ratio for every three-digit number. I think that's one of the big challenges with developing the LLPA grids.

How are you going to reconcile all that? Then, you kind of go beyond that to assuming you had separate LLPA grids and you somehow figured out how to do that, you still have all the gaming problems that go with that, and the adverse selection problems that go with that.

Those have to be resolved. Then finally, you have whatever objections the securitization market might have to whatever penalties they might impose on Vantage-scored paper versus FICO-scored paper.

I think there's significant problems to be overcome.

Got it. Then just to reconcile something.

I thought that you said in your prepared remarks that 10 T was going to be available for both the conforming and non-conforming market in the first half of calendar '26, and then in answering one of the earlier questions, I think Steve said you're not sure when 10 T is going to be available.

Am I One's a guess, and it is true that we're not sure. The FICO 10 T data is with the GSEs, is with the FHFA, and we can't give you a timeline.

We're confident it'll eventually be released.

Hey, Jeff, those are two different comments just to clarify. The non-conforming and conforming is around having FICO 10 T available on the direct licensing program, and the comment Steve talked about was having FICO 10 T available for the data for the market.

Okay. Thank you.

Does that make sense, what I said?

Yep.

Okay.

Yes, hi. Thank you so much.

Sorry to beat a dead horse here, but I guess just to clarify, do we need an LLPA grid for 10 T, or do you think the conforming market could accept the 10 T without that grid being out?

That's a great question, whether there'd be adjustment fee to the grid. 10 T is obviously much, much closer to classic FICO than Vantage is, but my guess is, when 10 T is made available, that there'll be adjustment to the grid for that.

Okay. Just a quick follow, I understand all of the issues that you've talked about, but are you expecting that the 10 T and Vantage grids would come out at the same time, and the implementation is going to be around the same time, or do you think it could happen in stages?

Certainly the industry would like them to come out at the same time. There's a lot of efficiency in that, and you probably saw the letter sent to the director at the FHFA this past week from 35 economists and think tanks and industry groups who all believe that it's critical that if and when any change is made away from classic FICO, that it be done simultaneously to both FICO 10 T and Vantage.

The industry has a preference for that. What the FHFA will ultimately do, no one knows.

We'll have to see. To the earlier point about FICO 10 T and LLPA grids for FICO 10 T, I would point out that FICO 10 T is architecturally very similar to classic FICO.

It's built on the same kinds of attributes weighted in a similar way. That's very different from Vantage.

Vantage has a different architecture and weights the factors differently. In terms of compatibility and closeness, FICO 10 T is much, much closer to classic FICO.

Don't confuse that with predictability, where FICO 10 T is significantly more predictive than classic FICO.

Understood. That's very helpful.

Then I wanted to ask about your mortgage revenue growth, we saw a nice acceleration this quarter relative to what we've been seeing. I'm just curious, are you just benefiting from maybe higher refi activity?

I know you don't disclose volumes, but just directionally, was it volume growth that was higher, or are you

just benefiting from all of the above? Yeah.

It's all of the above. There's some price there, there's some volume there, there's some refi volume there.

All of those are factors.

Got it. Thank you very much.

Great. Good afternoon.

Thanks for taking the questions, guys. Wanted to start out on the Platform business.

Obviously, nice quarter there. I know some of that was the migration and guessing some of that was the large deal, but just wanted to see, are we at a point where 30% plus ARR growth on the platform side should be sustainable again, or I guess how should we think about that in light of the really nice bounce back this quarter?

Kyle, we don't make promises, but we had 40% growth on platform for 16 quarters, then we were down a few a couple quarters in the just under 20% range. Now here we are at 30%.

It does move around. The total ARR is definitely going to go up.

That's a short answer to your question is ARR will go up, I think current levels are sustainable, that's not a crazy thing to think. We've got a lot of appetite for our new platform.

The total ARR is going to be driven by the platform. Because more and more we true seeing acceleration in platform growth and frankly the platform ARR is a bigger portion of the overall number now.

As that grows faster, it helps the overall number as well. We see continued, sustained, significant growth in ARR for the rest of the year, which is kind of what we've been talking about for a few quarters, and now you're starting to see it.

Okay. That is helpful and good to hear.

Then switching over to the card business, the origination revenue and the credit cards seems to be climbing in the right direction here the last few quarters, which is good to see. Just I know it's still early, but have you guys seen any disruption or changes in activity?

I know there's been some chatter around a potential 10% cap on card APRs, I guess anything you guys are seeing there, or is it still too early to tell in terms of when you guys are delivered the usage reports?

We haven't seen anything. We haven't seen any changes in activity.

There's been a lot of pre-qual activity in the card space, and decent originations. We haven't seen any changes.

That's great to hear. Thank you, guys, and nice quarter.

Thanks.

Hi, this is Sami On for George. In your discussions with the FHFA and GSEs, do you get the sense that a move from tri-merge to bi-merge is gaining traction?

We saw MBA came out with a single-score proposition, and also the regulator's focus has recently shifted to the bureaus. Just wanted to get your views on it.

There's certainly a lot of talk about it these days. The bureau position, I don't generally give the bureau position, but I think it's fair to say that the bureaus believe that tri-merge makes a lot more sense because the bureau files are not identical to one another, and if you chose two out of three files, some consumers on the margin are going to be underserved.

I think that's a fair point. That's just a fair point.

Set against that, tri-merge does give the bureaus a monopoly, and that's not a great thing. That would be an offset.

Here's the real challenge with moving to bi-merge, it's the same problem that we have with lender choice. When you get to choose between two credit scores, or when you get to choose your favorite two out of three credit bureaus, you're going to have gaming, you're going to have adverse selection, you're going to have all these problems occur.

There's a cost to be paid for that, that cost ultimately gets paid by Fannie and Freddie and potentially the US taxpayer. That is the biggest problem that has to be overcome, and frankly, I don't know what kind of a solution there is to that.

It's structural.

Okay. On software, can you talk about where you are in the investment cycle, how far along are you in the platform buildout, and when should we expect the investments to normalize?

We continue to invest in our Software business. We're really bullish on it, it's growing really nicely.

We do anticipate margin expansion because our new platform is built for scaling profitably. The improvements to profitability of our Software business will come more from additional volume and additional customers on the new platform versus reduced R&D spending, which of course is a lever and someday it will go down.

All right, great. Thank you.

Just maybe to start with the Scores business and volumes there, I saw a call out in the new slide deck, which is, by the way, excellent, that you guys saw positive volumes in all three of your underwriting lines. Can you maybe speak to some volume trends in the industry overall?

Are they improving? Then when you sort of turn the lens inward, how much of the improvement that you've seen, to the degree that there is any, is really industry-wide versus FICO innovation-led?

That's a good question. I think it's hard to call anything a trend at this point.

There's just a lot of uncertainty in the marketplace, again, which is one of the reasons why we've chosen not to update our guidance today. I don't think anybody really knows what's going to happen in mortgage.

Just, I think if rates continue to trend downward, we'll probably see more volumes there. Card, we already talked about there's some potential noise in that market, we'll see how real that is.

We've seen decent volumes throughout, not crazy growth, but not declines either. At least some margin or some volume increases across the board.

That's encouraging, and we'll see if that continues. In terms of how much of that is driven by our innovation, maybe a little bit.

In some cases, there are some different things that we're providing that provide some additional volumes, but most of this is the macro environment and what's happening in the auto lending industry or the mortgage or the card industry.

Pivoting to software, you did see a nice pickup in ACV bookings, obviously platform NRR growth is strong. Can you maybe provide a comment on what platform features, functions, use cases are really driving that recent momentum?

I'm not sure that it's any particular use cases, to be frank. Just a little bit of history here.

For many, many years, for tens, for decades, FICO was an application software company focused on solutions to half a dozen critical bank problems having to do with the life cycle, right, risk-oriented solutions. When we moved to the platform, we opened up a pretty vast set of potential solutions for banks that adopt the platform.

It's no longer just decisioning around originations and customer management and fraud. Just a much, much wider set.

That said, customers are coming to the platform for the basics. They come for originations, they come for customer management.

We're seeing those use cases as primary use cases. What's interesting is, particularly on the expand side, if you think about land and expand, they put in the platform and then they come up with all kinds of innovations on things they should be decisioning around that they have never done before.

There's a lot of that. I think it's fair to say that they come to the platform for the same kinds of risk management solutions they bought in the past.

Maybe I can squeeze a third in. Just on the predictive power of FICO 10 T, obviously you guys had the white paper out that showed a pretty compelling predictive lift in those key cohorts.

That was on sort of the basis of defaults, delinquencies. Can you maybe pivot that conversation to prepayments, and do you have a view on will 10 T be more predictive on prepayments than rival scores?

I think so, and I think it's important to note that credit default rates and prepayments are related. They're sides of the same coin in some ways.

For example, I've heard people say, well, improving credit default rates doesn't really matter in the conforming market because Fannie and Freddie stand behind it, and so who cares about the credit default rates? When you have a credit default, it is functionally the same as a prepayment risk for those who hold the paper.

I think 10 T is going to help on both of sides. Thank you.

Hey, thanks so much. Just had a software question.

I think you said 75 of your largest customers are using multiple use cases now. I was just wondering how that has trended over the past year or so and what's driving the land-and-expand momentum?

Thank you.

I'm not sure I followed the question.

It's the land and expand. Essentially, yeah, what's driving is that a lot of people bought in just to see how it would work, right?

They had to be shown that it would work. Once they get it installed, the next use case is a lot easier than the first use case.

They find more ways to use it, and they're pleased with the way it's working. The expand piece is, I shouldn't say easy, but it's a lot easier than the land because once it's in and it's working, they look for more ways to use it.

The expand is running at roughly the same rate as land. They're kind of neck and neck on growth rate.

There's two styles, right? One is expansion of the use cases that they started with, and the second is bringing on new use cases.

Our revenue goes up in both situations.

Great. Thank you.

Then just one more question on the volume side. I think we've all read some headlines about lenders struggling with their cost basis here.

Was just wondering if you're seeing any of this from your perspective, and any changes in the lender behavior that you can call out relating to your business? Thank you.

We really haven't. How critical FICO Scores are in the system, and we really have not seen any changes.

Hey, good evening, guys. Just wanted to ask one question on the Software business.

The trends on the bookings side have been pretty positive, but you also had mentioned that the next-gen platform and I think the enterprise fraud solution are, I guess not yet generally available. Are they helping to drive some of the bookings growth right now, pending the general availability at all?

Thanks.

Not yet. All the growth you're seeing predates the enterprise solution.

Cool. Thanks, guys.

Good afternoon, thank you for taking my question. I do want to go back to President Trump's 10% credit card interest rate cap policy question.

If it is implemented, how will it potentially impact FICO? Do you think consumers will go to other form of loans, which will still need to use FICO Score for underwriting?

Also, could you please kind of help us size the credit card exposure? Thank you.

In terms of will consumers look for alternate credit if the card providers provide fewer cards to deeply subprime, your guess is as good as mine, but I would assume so. I'm not sure I

The second question was the size of our credit card originations revenue, but we don't provide that.

We don't break that out. Now, who knows whether this actually ever happens, but if it does, I think it puts that much more pressure on lenders to understand those subprime credits really, really well, and my guess is that they would be doing extra work involving FICO Scores and credit data to understand what happens on the margin.

If that went to some other type of personal lending or something else that would not apply, then obviously use FICO Scores in that area.

Does it involve a shift to BNPL or something? Obviously, we'd be beneficiaries in all those scenarios.

Got it, that's helpful. Then, going back to software, I noticed that you mentioned that that was an above-average-sized, multi-use case platform deal in the first quarter.

Is it really a one-off deal that we shouldn't expect this to recur, or FICO Platform begins to gain recognition and traction, and more similar deals could come more frequently in the future?

It is the latter. There's no question that the deal size is going up, the frequency of it, and the amounts.

I

I would just add to that, we think that FY '26 ACV bookings are going to be significantly higher than FY '25. We've got a lot of deals we've already signed, we've got a lot of deals in the pipeline.

There's a lot of momentum here, and we're seeing it in more and bigger deals.

All right, thanks a lot.

Great. Thank you.

My first question, you made a comment earlier on that you're well-positioned to well exceed guidance for fiscal 2026. Can you just talk about that a little bit further?

What in your mind were you overly conservative on, specifically if you're willing to talk about that? Maybe also touch on how things are going, the reseller market, mortgage market ready for these new two pricing plans, for reseller in particular?

Is that meaningfully ahead or behind or on schedule with what you originally were thinking when you first rolled this out?

To take those in reverse order, the direct license program with the resellers is on track, roughly as expected. Frankly, whether it comes a little sooner or a little later does not have a big revenue impact on us.

It's really pretty close. As we said earlier, we're not completely agnostic, but it's pretty close.

It's not enough to drive a change in guidance, for example. Then as to what might have us change our guidance, it presumably would be volume.

The price is extremely well understood, and we published it and that price is here for the year. It's really much more around volume and what happens with interest rates, and that no one knows, and so that's why we want another quarter to see how it plays out.

I think, like I said, there's a lot of uncertainty in the marketplace, and I think 3 months from now we're going to have a much better idea. If we were to take a guess now, you'd probably still think we were being too conservative.

At this point, in 3 months we're going to know a lot more, we'll have one more quarter under our belts, and we'll have a much better idea of how to do this. We really don't want to get into the situation where we're continually updating our guidance every quarter.

We have annual guidance, we try to stick to that until it's pretty clear we can move to some more meaningful estimation of what it looks like, and that's what we're doing here.

Then my last question if I could. Can you just talk about pricing for calendar '26 for auto and then with credit card and personal loans?

Is auto going to be up north of 10% again this year, for example?

We don't disclose the specifics of it. It's a lot more complicated in auto and card because there's different price points depending on different tiers or different types of markets.

It's a lot more complicated than that, and we don't get into the detail of that basically for competitive reasons.

Thank you.

Great. Thank you.

Hey, I think you mentioned in the slide deck that there was some incremental headcount investment in FICO and then increased marketing. Maybe help us understand, was that related to the reseller adoption or what drove those investments?

We are investing in go-to-market across the board, both on the Software side and on the Scores side. After I would say many years of conservatism and growing headcount in direct sales and partner sales, we've been fairly aggressive this year in expanding that headcount.

I would say it's both on both sides, software as well as scores.

Great. Then just in terms of goalposts for the resellers actually going live, do you have any sense, would you expect the big five to go live simultaneously or once sequential?

Any sense of just timing on that?

My guess is that it will not be a big bang with all of them going live at the same time, it'll probably be staggered. Close in time.

We know all of the resellers we've signed with are well underway. I think for their own benefit, they'll want to be able to offer the direct license program as quickly as possible.

I would expect a convergence on timeline there, but I couldn't say that it's all going to happen simultaneously.

Thank you.

Good evening, thanks for taking my question, and congrats on the five resellers. I just want some more color on that.

How much of the total resellers market would you say the five represent, the established in size on these wins?

How much of the market do those resellers represent?

Yes.

Somewhere in the 70, 80% range.

Got it. Okay.

Just as a follow-up, on your last earnings call, you discussed some operational hurdles in having resellers move to the direct model. Could you just talk about how you're addressing some of those hurdles?

We really don't have any operational hurdles. It's moving very smoothly, we're working our way through the details, and we're highly confident that the program will be live in the relatively near future.

Got it. Thank you.

No, that's everything. We're good.

Great quarter. Thank you.

Thanks, all.