Fair Isaac Corporation (FICO) investor relations material

Business overview and capital strategy

• Consistent share buybacks have reduced outstanding shares from 74 million to 23 million over time, funded by growing cash flow and maintaining leverage in the 2–3x range.

• The business has strengthened over the past 14 years, with a focus on monetizing intellectual property and transitioning to a decisioning platform model.

• Price increases for scores began about a decade ago after 30 years of fixed pricing, with a steady approach to capturing more value.

• Mortgage score prices have risen from $0.05 to $10, but new models now offer a $0.99 option to address regulatory concerns.

• Internal targets aim for revenue growth in the teens, margin expansion, and EPS growth above 30% with buybacks.

Mortgage market dynamics and regulatory environment

• Recent stock volatility is attributed to political scrutiny over mortgage pricing and regulatory focus on housing affordability.

• New pricing models, including a $0.99 option, were introduced in response to FHFA concerns, with certification expected soon.

• VantageScore's entry is seen as limited in impact, with FICO Score 10T offering higher predictiveness and similar pricing.

• Gaming the two-score system could affect less than 10% of the market, with no expected volume loss due to dual pulls.

• FICO Score 10T adoption is expected to grow, especially once all scores are accepted in the conforming market, though inertia remains.

Pricing strategy and market value

• Annual pricing reviews occur in late summer, with current pricing reflecting 2026 rates; 2027 pricing is undecided.

• The value gap between what is charged for a FICO mortgage score and its perceived value remains significant.

• Price increases in auto have been modest, with ongoing evaluation of market dynamics and value delivered.

• Card market pricing is largely inflation-based due to higher volume and greater elasticity.

• Volume forecasts are conservatively estimated, with guidance not relying on volume increases.