FICO reported a strong quarter, beating expectations and raising full-year guidance, driven by a 127% surge in mortgage origination revenues. Management is actively navigating the FHFA's decision to allow VantageScore in the conforming mortgage market, positioning a newly priced FICO 10T product at price parity to neutralize the competitive threat. FICO raised FY26 revenue guidance to $2.45B (+23% YoY) and Non-GAAP EPS to $40.45 (+35% YoY), reflecting strong momentum.
FICO reported a strong quarter, beating expectations and raising full-year guidance, driven by a 127% surge in mortgage origination revenues. Management is actively navigating the FHFA's decision to allow VantageScore in the conforming mortgage market, positioning a newly priced FICO 10T product at price parity to neutralize the competitive threat. FICO raised FY26 revenue guidance to $2.45B (+23% YoY) and Non-GAAP EPS to $40.45 (+35% YoY), reflecting strong momentum.
FICO reported a strong quarter, beating expectations and raising full-year guidance, driven by a 127% surge in mortgage origination revenues. Management is actively navigating the FHFA's decision to allow VantageScore in the conforming mortgage market, positioning a newly…
Management expressed confidence in the competitive positioning of FICO 10T, downplayed VantageScore competitive threats, and highlighted strong growth and guidance raises.
Scores revenue grew 60% YoY, with mortgage originations up 127%, demonstrating robust market demand.
Guidance · revenue to $2.45B
Management emphasizes AI as a tremendous opportunity, with FICO platform architected to be agentic by design and 137 AI-based patents. However, AI in credit scoring is limited by regulatory requirements on explainability and model governance.
Mortgage origination revenues up 127% year-over-year. Management expressed confidence in the competitive positioning of FICO 10T, downplayed VantageScore competitive threats, and highlighted strong growth and guidance raises.
Management expressed confidence in the competitive positioning of FICO 10T, downplayed VantageScore competitive threats, and highlighted strong growth and guidance raises.
“10T at 99 cents is at parity with Vantage at 99 cents. And so, you know, on both predictability and price, we think we're highly competitive”
“In a gaming scenario, if there's true consumer shopping for the best rate and the system is going to be gamed in that way, that originators and lenders would wind up pulling both scores.”
“I would certainly consider our stock at these levels to be an opportunistic time.”
“It's really up to the FHFA to sign off on the calculation of the scores by the resellers. And then we're pretty much there.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| EPS | FY2026 | $40.45 | $40.45 | RAISED |
| Revenue | FY2026 | $2.45B | $2.45B | RAISED |
Plaid is a key partner for the upcoming UltraFICO product, and progress toward launch is a potential catalyst.
“We're moving closer to the go live dates of our next generation cashflow ultra FICO score with our strategic partner Plaid”
… 10-T data in the timeline provided by the FHFA and GSEs. In the last quarter, we added 11 more lenders to our FICO Score 10-T Early Adopter Program. As a reminder, through this program, FICO Score 10-T is made available for free with the purchase of Classic FICO. The 55 lenders in the program account for more than $495 billion in annual serviceable originations when evaluated using 2025 HMDA data and more than $1.6 trillion in eligible servicing. We're moving closer to the go live dates of our next generation cashflow ultra FICO score with our strategic partner Plaid and the FICO mortgage direct licensing reseller partners. We continue to actively work alongside participants to support testing on both initiatives. As AI adoption accelerates, we recognize the need of stakeholders to weigh the associated opportunities and risks. At FICO, we view AI as a tremendous opportunity that we've committed significant resources to for several years. In the scores business, AI is limited by strict regulatory requirements on credit underwriting outcome explainability and model governance. In addition, our scoring models are supported by proprietary data access, mainly with credit bureaus, and …
Management cites Upstart's regulatory shutdown as an example of the difficulty AI models face in underwriting, reinforcing their moat.
“The experiment with AI and some of the black box underwriting that was undertaken several years ago by Upstart ended with the CFPB shutting it down.”
Thank you for taking my question. So the AI disruption narrative hasn't gone away. Could you please talk about why it's very hard for whatever vantage or a third-party AI platform to come in and create a more predictive credit score, which will be adopted by lenders and consumers if they can offer a lower price? Thanks.
… That requires compliance with all kinds of things that our scores take into account. I mean, just one small example would be redlining, which is not allowed in the United States. Is it a predictive factor? Yes, it's a predictive factor, but it's not allowed. And so you can't use redlining as a factor in a credit score. Well, AI would find 100 other ways to get to the same result. And so the regulators are not going to be comfortable with AI making underwriting decisions when they're not explainable, when it's a black box, when they can't demonstrate that discrimination is not occurring. So that's kind of the core problem with using AI in underwriting. I mean, AI is great in a lot of things, but using it in underwriting, the biggest play is that it's going to get around the rules and regulations of the fair lending laws. Now, you know, you're probably aware that FICO scores carry with them 32 reason codes. So when a consumer is turned down for credit, they get a letter and or the line is not increased on a request or whatever, they get a letter and the letter says, here's why. And that reaches into the FICO score and the reason codes. And those reason codes are shared with the consumer. And so there's a level of comfort with the regulators and with the consumer that they understand what's going on. I would also point out that the experiment with AI and some of the black box underwriting that was undertaken several years ago by Upstart ended with the CFPB shutting it down. So I think there's some real challenges, not that it'll be this way forever. We are prepared for the day when AI is appropriate in underwriting. We have patents in the area of explainability and ethical AI. And so I think we're in an advantage position. But I would not hold my breath. I think that's going to take a long time. And then on predictiveness of the score, I would tell you that our latest and greatest score is more predictive than Vantage, and frankly, more predictive than any other score out there. know asterisk i would put on that is there are lenders who build proprietary scores on top of fico and they leverage their first party data and so they have incremental data and they get incremental signal out of that and so they there are some proprietary scores that are really excellent that are you know most typically developed on top of fico got it and then maybe quickly on llpa