FICO reported strong Q1 FY2026 results, with scores segment revenue up 29% due to mortgage originations growth. The company reiterated its full-year guidance, citing macro uncertainty. Key strategic initiatives include the direct licensing program for mortgage scores and partnerships like those with Plaid. Scores segment revenue up 29% YoY, driven by B2B scores (mortgage originations revenue +60% YoY) and B2C growth of 5%.
Buzzberg readManagement reiterates FY26 guidance, cites macro uncertaintyFICO reported strong Q1 FY2026 results, with scores segment revenue up 29% due to mortgage originations growth. The company reiterated its full-year guidance, citing macro uncertainty. Key strategic initiatives include the direct licensing program for mortgage scores and partnerships like those with Plaid. Scores segment revenue up 29% YoY, driven by B2B scores (mortgage originations revenue +60% YoY) and B2C growth of 5%.Read full analysisCollapse analysis
FICO reported strong Q1 FY2026 results, with scores segment revenue up 29% due to mortgage originations growth. The company reiterated its full-year guidance, citing macro uncertainty. Key strategic initiatives include the direct licensing program for mortgage scores and partnerships like those with Plaid. Scores segment revenue up 29% YoY, driven by B2B scores (mortgage originations revenue +60% YoY) and B2C growth of 5%.
Software segment revenue up 2% YoY, with platform revenue growth of 37%, but non-platform revenue declined 13%.
Platform ARR grew 33% YoY, while non-platform ARR declined 8%, reflecting migrations and legacy end-of-life.
Direct mortgage licensing program is progressing, with five resellers signed and integration testing underway.
Five strategic resellers to offer FICO Mortgage Direct Licensing
Scores segment revenue up 29% YoY, driven by B2B scores (mortgage originations revenue +60% YoY) and B2C growth of 5%.
03
Product
FICO Score 10-T availability for direct licensing expected H1 2026
Software segment revenue up 2% YoY, with platform revenue growth of 37%, but non-platform revenue declined 13%.
04
Software
Software ACV bookings record $38M, up 36% TTM
Platform ARR grew 33% YoY, while non-platform ARR declined 8%, reflecting migrations and legacy end-of-life.
AI, capex & demand read
AI
Platform & monetization
Management discussed AI in the context of its FICO Platform and a new foundation model, highlighting recognition as a leader in Decision Intelligence Platforms and plans to expand beyond financial services into other verticals with partner-led go-to-market, but did not provide specific AI-related financial metrics or guidance.
Demand
Bookings & conversion
Management is confident in exceeding guidance, driven by strong scores growth and software momentum, though cautious about macro uncertainty.
Capex
Investment and capacity
Operating expenses are expected to trend upward modestly through the fiscal year, driven primarily by personnel expenses, reflecting continued investment in go-to-market and product development, but no specific capital expenditure guidance was provided.
Tone · Confident
Management expressed confidence in meeting and potentially exceeding guidance, citing strong momentum in scores and software bookings, while remaining cautious about macro uncertainty.
Supply-chain alpha
A1
FICO's direct licensing program is nearing live status with multiple resellers, with one large reseller completing production integration testing and another close behind.
“One large reseller is close to completing production integration testing. Another large reseller has completed that testing and is now testing system integration downstream.”
FICO's management stated that FICO and Vantage scores differ by more than 20 points 30% of the time, complicating any potential substitution for LLPA grids.
Plaid's open finance network is a key distribution channel for FICO's new product, expanding its reach into real-time cash flow data for credit scoring.
“This quarter, we also announced a strategic partnership with Plaid to deliver the next generation of Ultra FICO Score.”
… 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 the 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 Ultra FICO 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 Ultra FICO 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 permission data. Plaid powers nearly 1 million secure financial connections each …
FICO's direct licensing program is nearing live status with multiple resellers, with one large reseller completing production integration testing and another close behind. — The direct licensing program may shift revenue from credit bureaus to FICO, potentially impacting bureaus' mortgage-related revenue.
… of four new strategic reseller participants to the FICO Mortgage Direct Licensing Program, Zactus, Cotality, Ascend Companies, and CIC Credit. Additionally, we signed a DLP agreement to add another participant, Meridian Link, 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 …
FICO's management stated that FICO and Vantage scores differ by more than 20 points 30% of the time, complicating any potential substitution for LLPA grids.
Got it. Okay. That's helpful. And 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, but 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?
I think it's unlikely that grids will be a 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 Vantage score are more than 20 points different 30% of the time in both directions. It's not consistently one direction off. which means that it's very, very hard to just substitute one score for another, a Vantage score 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. And so I think that's one of the big challenges with developing the LLPA grids. How are you going to reconcile all that? And then, you know, you kind of go beyond that to assuming you had separate LLPA grids and you somehow figured out how to do that, you know, you still have all the gaming problems that go with that, you know, and the adverse selection problems that go with that. Those have to be resolved. And then you finally you have whatever objections the securitization market might have to, you know, whatever penalties they might impose. on Vantage scored paper versus FICO scored paper. So I think there's significant problems to be overcome.
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