FICO's fiscal Q3 2026 revenue rose 26% to $674.2M as higher mortgage-score prices lifted B2B Scores 49%, while software grew 1.5% and debt-funded buybacks helped GAAP EPS rise 41% to $10.45.
Revenue
$674M
+25.7% YoY
Net income
$237M
+30.5% YoY
Diluted EPS
$10.45
+41.2% YoY
Operating margin
53.8%
Overview
Fair Isaac, the company behind the FICO credit score, grew revenue 26% in fiscal Q3 2026 (the quarter ended June 30, 2026; FICO's fiscal year ends in September) to $674.2 million. Almost all of the growth came from one place: business-to-business score sales rose $131.6 million, which the 10-Q attributes "primarily" to "a higher mortgage origination scores unit price." In plain terms, lenders paid more for each FICO Score pulled when someone applied for a mortgage. The software business barely grew (+1.5%), and its profitability fell.
GAAP diluted EPS (earnings per share under standard accounting rules) rose 41% to $10.45, faster than net income's 30.5% rise, because FICO has been buying back its own stock heavily with borrowed money: diluted shares outstanding fell 7.6% to 22.7 million. Total debt reached $5.6 billion, up from $3.1 billion at the end of fiscal 2025. Management raised its full-year revenue guidance by $80 million to $2.53 billion.
Key figures
Metric
Fiscal Q3 2026
Fiscal Q3 2025
YoY Change
Total revenue
$674.2M
$536.4M
+25.7%
Scores segment revenue
$458.9M
$324.3M
+41.5%
– B2B Scores (sold to lenders and other businesses)
$400.0M
$268.5M
+49.0%
– B2C Scores (myFICO, consumer royalties)
$58.9M
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Operating margin is the share of revenue left after running the business, before interest and tax. ARR (annual recurring revenue) is FICO's annualized run-rate of subscription software revenue. DBNRR (dollar-based net retention rate) compares what the same group of existing software customers is paying now with what they paid a year earlier; above 100% means existing customers are spending more, net of any who left. Non-GAAP figures and free cash flow come from FICO's July 29, 2026 earnings release (8-K Exhibit 99.1); everything else is from the 10-Q.
Fiscal year to date (nine months to June 30, 2026): revenue $1.878 billion (+27.3%), operating income $999.1 million (53.2% margin vs. 46.6% a year earlier), net income $660.0 million (+32.8%) and diluted EPS $28.12 (+39.8%). B2B Scores revenue for the nine months was $1.066 billion, up 53.8%.
Takeaway: FICO's growth this quarter is overwhelmingly a pricing story. B2B Scores added $131.6 million of revenue while the Scores segment's own costs rose just $2.4 million, so nearly every extra dollar became profit. The segment now keeps 91 cents of each revenue dollar as operating income. That makes FICO's earnings unusually dependent on continuing to raise the per-score price mortgage lenders pay, and the balance sheet ($5.6 billion of debt, a $4.1 billion stockholders' deficit) is being run on the assumption that it can.
Scores: mortgage pricing does the heavy lifting
Scores now make up 68% of FICO's revenue, up from 60% a year ago.
B2B (+49.0%, to $400.0M): the 10-Q names one main driver for the quarter: a higher unit price for mortgage origination scores. For the nine-month period it cites "both a higher unit price and an increase in volume of mortgage origination scores," so volume helped earlier in the year, but the quarter's explanation rests on price. FICO does not break out mortgage revenue as a separate line in the 10-Q.
B2C (+5.4%, to $58.9M): the increase came from "an increase in royalties derived from scores sold indirectly to consumers through credit reporting agencies," not from FICO's own myFICO.com subscriptions.
Profitability: Scores segment operating income rose 46% to $416.9 million, and its margin widened from 88% to 91%. The 10-Q credits "higher business-to-business scores revenue driven by a higher mortgage origination scores unit price."
What the filing does not say: the 10-Q does not discuss FICO's direct-licensing program for mortgage scores, the Federal Housing Finance Agency's acceptance of VantageScore for mortgages sold to Fannie Mae and Freddie Mac, or a move from three credit reports per mortgage application ("tri-merge") to two ("bi-merge"). It states only that there have been "no material changes" to the risk factors in its fiscal 2025 annual report. The one competitive/legal matter it does describe is litigation: FICO remains a defendant in consolidated class-action antitrust lawsuits over how FICO Scores are distributed, in which a Sherman Act Section 2 claim (the monopolization provision of US antitrust law) and related state-law claims survived a motion to dismiss and are in discovery. The 10-Q's silence on mortgage-score competition is not evidence the risk has gone away; the filing simply doesn't quantify it.
Software: platform shift under way, but margins are paying for it
Software metric
Fiscal Q3 2026
Fiscal Q3 2025
YoY Change
On-premises & SaaS software revenue
$197.0M
$187.9M
+4.8%
Professional services revenue
$18.3M
$24.2M
−24.3%
Platform ARR
$412.8M
$254.2M
+62%
Non-platform ARR
$403.0M
$484.9M
−17%
Platform net retention
148%
115%
+33 pts
Non-platform net retention
82%
97%
−15 pts
ACV bookings (new annualized contract value signed)
$29.1M
$26.7M
+9.0%
Segment operating margin
26%
32%
−6 pts
FICO is moving customers from older, standalone decisioning products onto its cloud-based FICO Platform, and the shift is clearly visible: Platform now accounts for 51% of software ARR, up from 34% a year ago, and existing Platform customers are spending 48% more than a year ago. But non-platform ARR fell 17% and non-platform retention dropped to 82%, meaning existing non-platform customers are paying 18% less than a year earlier. Some of that is likely migration onto Platform rather than lost business, but the filing does not split the two. Net, total ARR grew a more modest 10%.
Reported software revenue grew only 1.5% because FICO recognized less upfront license revenue (the 10-Q cites "a decrease in license revenue recognized at a point in time") and deliberately shrank professional services, citing "our strategy to emphasize higher-margin software over professional services." Software segment operating income fell 19% to $55.0 million, which the 10-Q attributes to "a decrease in sales of higher-margin software recognized at a point in time and an increase in third-party data center hosting costs." Higher hosting costs are a side-effect of running more customers in the cloud.
Below operating income: debt costs and taxes
Interest expense, net rose 82% to $59.9 million (from $32.9 million) on more borrowing: $1.5 billion of 6.00% notes issued in May 2025, $1.0 billion of 6.25% notes issued in March 2026, the $1.5 billion term loan drawn in June 2026, and a higher average balance on the revolving credit line.
Effective tax rate was 24.6% vs. 23.3% a year earlier; for the nine months it was 23.5% vs. 17.2%. The 10-Q says a lower stock price for awards that vested in December 2025 shrank the tax benefit FICO records when employee stock awards vest.
GAAP vs. non-GAAP: non-GAAP EPS of $12.18 (per the 8-K) is $1.73 above GAAP EPS, mainly by adding back $2.31 per share of stock-based compensation, less $0.59 of related income-tax adjustments. The gap widened from $1.17 a year earlier because stock-based compensation rose 25% to $52.3 million.
Buybacks and debt
FICO spent $2.3 billion repurchasing shares in the quarter (vs. $511.3 million a year earlier) and $3.1 billion in the first nine months (vs. $878.1 million). The quarter includes a $1.5 billion accelerated share repurchase: FICO paid Wells Fargo Securities upfront and received about 80% of the expected shares immediately (1,055,103 shares), with the rest due at settlement, expected in fiscal Q4 2026. It was funded with a new $1.5 billion term loan maturing May 2028.
At June 30, 2026, FICO had:
$710.0 million drawn on its $1.0 billion revolving credit line (5.643% weighted-average rate), the $1.5 billion term loan (5.863%), and $3.4 billion carrying value of senior notes, for about $5.6 billion of debt in total.
$248.4 million of cash.
A stockholders' deficit of $4.1 billion (vs. $1.7 billion at September 30, 2025): liabilities exceed assets on the balance sheet, largely because years of buybacks are recorded as reductions of equity.
$800.0 million left under the June 2026 buyback authorization (including the $300.0 million ASR prepayment not yet converted into shares).
The term loan requires $75.0 million quarterly principal repayments starting September 30, 2026 ($300.0 million over the next 12 months). The credit agreement caps FICO's leverage ratio (debt relative to earnings) at 4.5x through December 30, 2026, stepping down to 4.0x and then to 3.5x from December 31, 2027. FICO says it was in compliance with all covenants.
Cash generation remains strong: operating cash flow was $380.4 million in the quarter (vs. $286.2 million) and free cash flow (operating cash flow minus capital spending) was $370.3 million (vs. $276.2 million), per the 8-K.
Guidance and outlook
FICO raised its fiscal 2026 guidance in the July 29 earnings release:
Fiscal 2026 guidance
Previous
Updated
Revenue
$2.45B
$2.53B
GAAP net income
$825M
$850M
GAAP EPS
$35.60
$36.86
Non-GAAP net income
$946M
$979M
Non-GAAP EPS
$40.45
$42.43
Subtracting the nine-month results from the updated full-year targets implies fiscal Q4 revenue of roughly $652 million and GAAP net income of roughly $190 million, both below fiscal Q3's $674.2 million and $237.2 million. That sequential step-down could reflect conservatism, seasonality in mortgage activity, or the higher interest cost of the June term loan; the release does not explain it.
Our read: the core Scores business is extraordinarily profitable, and the June quarter shows its pricing power is intact. Two things to watch in the fiscal 2026 10-K (expected in early November): whether Platform growth starts to show up in software revenue and margins rather than only in ARR, and whether B2B Scores growth holds up once the mortgage-score price increases are in the prior-year comparison. With $5.6 billion of debt, rising interest costs and a leverage covenant that tightens from December 31, 2026, FICO has less room than before if Scores pricing growth slows.