FICO (Fair Isaac Corporation) — Q3 FY2026 Earnings Preview

Ticker: FICO (NYSE) Earnings Date: July 29, 2026 (After Market Close) Prepared: July 28, 2026 Fiscal Period: Q3 FY2026 (Quarter Ending June 30, 2026)

1. Earnings Preview

Key Takeaway: The setup into Q3 FY2026 is constructive but not without risk — consensus is a moderate bar after a massive Q2 beat, and the single biggest swing factor is whether mortgage origination volumes held up in the April–June quarter given rising 30-year rates (back above 6.5% per Equifax and TransUnion commentary).

FICO enters Q3 FY2026 earnings with momentum from a blowout Q2 — revenue of $691.7M and non-GAAP EPS of $12.50 both crushed consensus — and management raised full-year FY2026 guidance to $2.45B revenue and $40.45 non-GAAP EPS. The bar for Q3 is set at $684.7M revenue and $11.95 non-GAAP EPS (consensus), representing a modest sequential step-down from Q2's elevated Scores revenue, which management explicitly guided conservatively given the difficulty of forecasting mortgage volumes. Estimate revisions have moved higher since the Q2 print — Q3 consensus revenue rose from $679.9M to $684.7M and EPS from $11.78 to $11.95 — but the trajectory is modest, suggesting the street is not aggressively front-running upside. The stock has surged ~32% since the April 28 earnings date (vs. IGV +8%, SPY +4%), pricing in meaningful execution, though it remains well below its 52-week highs. The key wildcard is VantageScore adoption momentum: both Equifax and TransUnion reported that VantageScore usage in mortgage jumped to ~30% of inquiries in Q2 calendar 2026 (FICO's fiscal Q3), with some lenders going VantageScore-only — a trend that could pressure FICO's B2B Scores volumes even if management has guided for zero share loss in FY2026.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus is a moderate bar — Q3 revenue of $684.7M implies a slight sequential decline from Q2's $691.7M, consistent with management's conservative volume guidance. B2B Scores revenue is the bigger swing factor: mortgage origination volumes deteriorated in the quarter per bureau peers (rates back above 6.5%), creating downside risk to the $413.1M B2B consensus, while Platform ARR acceleration ($359.6M consensus) is the more predictable upside driver.

Table 1 — Q3 FY2026 Current Quarter Snapshot (All Key KPIs)

Source: Visible Alpha Consensus and Actuals Data. All consensus figures as of July 28, 2026. Prior year actuals are Q3 FY2025 (quarter ended June 30, 2025). FY guidance from Q2 FY2026 earnings call (April 28, 2026).

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs: Total Revenue & Non-GAAP EPS)

Pattern: FICO has beaten revenue consensus in 7 of the last 8 quarters and non-GAAP EPS in 6 of 8, with the sole revenue miss in Q1 FY2025 driven by a mortgage origination volume shortfall — the same risk factor heading into Q3 FY2026. Beat magnitude has accelerated sharply in recent quarters (Q2 FY2026 revenue beat of +9.1% was the largest in the series), raising the bar for Q3.

3. Guidance & Commentary Evolution

Key Takeaway: Management raised FY2026 guidance materially at Q2 earnings (April 28, 2026) and has not issued any subsequent updates — the raised guidance stands as the current baseline. Tone is confident but deliberately conservative on mortgage volumes; CFO Weber explicitly noted they “guide very conservatively” on mortgage and “tend to take the same conservative approach for the rest of the year.”

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have moved modestly higher since the Q2 print — Q3 revenue consensus rose +0.7% and EPS +1.4% from the post-earnings baseline — suggesting the street is cautiously adding upside but not aggressively chasing. The gap between consensus and guidance is wide (~4–7% above FY guidance), which is a cushion if management's conservative volume assumptions prove accurate, but creates downside risk if mortgage volumes disappointed materially in Q3.

Source: Visible Alpha Consensus and Actuals Data. Post-earnings baseline uses consensus as of May 5, 2026 (5 trading days after April 28, 2026 Q2 earnings). Current consensus as of July 28, 2026. FY guidance from Q2 FY2026 earnings call.

Revisions are uniformly positive but modest across all KPIs since the Q2 print, consistent with a market that believes management's guidance is conservative but is waiting for Q3 confirmation before adding more aggressively. The widest consensus-vs-guidance gap is on non-GAAP EPS (+6.8%), reflecting the market's expectation that FICO's operating leverage and buyback program will continue to drive EPS above the guided range.

5. Stock Performance

Key Takeaway: FICO has surged ~32% since the April 28 Q2 earnings date, dramatically outperforming IGV (+8%) and the S&P 500 (+4%), driven by a combination of estimate revisions higher and multiple re-rating as the market digested the magnitude of the Q2 beat and guidance raise; the stock remains well below its 52-week highs, suggesting the re-rating is not yet complete if execution continues.

FICO vs. IGV (iShares Expanded Tech-Software ETF) vs. S&P 500 — Indexed to 100 at April 28, 2026 (Q2 FY2026 Earnings Date). Source: Yahoo Finance.

Key Events Since Q2 Earnings (April 28, 2026):

• April 28, 2026: Q2 FY2026 earnings beat — revenue $691.7M vs. $634.0M consensus (+9.1%), non-GAAP EPS $12.50 vs. $11.07 (+12.9%); FY2026 guidance raised to $2.45B revenue and $40.45 non-GAAP EPS. Stock closed roughly flat on the day despite the large beat, suggesting initial skepticism.
• May 5, 2026: FICO presented at investor conference; no material guidance update. Stock began recovering from post-earnings flatness.
• May 18–22, 2026: FICO World 2026 (Orlando, May 19–22) — stock rallied ~14% in the week surrounding the event as management showcased platform innovations and agentic AI capabilities, driving a re-rating of the software segment.
• June 3–5, 2026: Stock pulled back ~8% from highs, likely reflecting broader software sector weakness (IGV also declined) and rising mortgage rate concerns as 30-year rates moved back above 6.5%.
• July 2, 2026: UBS raised price target from $1,250 to $1,270 (Neutral rating maintained) — modest positive signal.
• July 15, 2026: FICO announced Q3 FY2026 earnings date of July 29, 2026 after market close. Stock began a sustained rally into the print, gaining ~10% in the final two weeks of July.

Sector ETF: IGV (iShares Expanded Tech-Software ETF) used as the sector benchmark, appropriate for FICO's analytics software business. FICO's +32.2% return since earnings compares to IGV's +8.0% and SPY's +4.1%, representing ~24 percentage points of alpha generation in approximately 3 months.

6. Peer Commentaries — Read-Through Analysis (Last 60 Days, Current Quarter)

Key Takeaway: Bureau peers (Equifax, TransUnion, Experian) reporting on the April–June 2026 quarter (FICO's fiscal Q3) paint a mixed-to-cautious picture for FICO's Scores segment: mortgage origination volumes came in weaker than expected as 30-year rates rose back above 6.5%, and VantageScore adoption accelerated sharply to ~30% of mortgage inquiries — both headwinds to FICO's B2B revenue that management had guided conservatively around. Software read-throughs are more constructive, with peers citing stable-to-improving lending activity and strong demand for analytics and AI governance solutions.

Equifax (EFX) — Q2 2026 Earnings Call (July 21, 2026)

Relevance: Equifax is FICO's primary distribution partner for mortgage scores; FICO scores constitute ~50% of Equifax's U.S. mortgage revenue and ~7% of total Equifax revenue. Equifax's Q2 2026 covers the same calendar period as FICO's fiscal Q3 2026 (April–June 2026).

• Mortgage volumes weaker than expected: U.S. 30-year fixed mortgage rates rose 30 bps to ~6.6% during Q2 (vs. 6.3% when April guidance was given), causing industry transaction volumes to run below expectations. Equifax now projects full-year 2026 mortgage market originations to be down low single digits. This is a direct headwind to FICO's B2B Scores revenue, which is heavily weighted to mortgage origination volumes.
• VantageScore adoption accelerating rapidly: VantageScore volumes in Q2 were up nearly 3x vs. Q1, totaling 2.2 million transactions. Approximately 1,200 mortgage lenders are pulling a free VantageScore alongside a paid FICO score for system testing. About 100 lenders (primarily smaller ones and HELOC underwriters) are using VantageScore exclusively at $1 — a small but rapidly growing segment. Equifax plans to maintain the $1 VantageScore price through end of 2027.
• FICO's proposed “success fee” model not gaining traction: Equifax stated the $66 funding fee model is “commercially and legally problematic” under RESPA regulations, which require fair treatment of consumers on services charged to them. This is a direct challenge to FICO's Direct Licensing Program pricing strategy and could delay or limit the program's revenue contribution.
• FICO score revenue is zero-margin for Equifax: Equifax makes no margin on FICO score sales, meaning any shift to VantageScore is margin-neutral for Equifax but directly impacts FICO's royalty revenue. Equifax's guidance for Q3 2026 assumes FICO scores continue to be calculated for all mortgage transactions with limited VantageScore revenue.
• Implication for FICO: The combination of weaker mortgage volumes and accelerating VantageScore adoption creates downside risk to FICO's Q3 B2B Scores consensus of $413.1M. However, FICO management has explicitly guided for zero VantageScore share loss in FY2026, and the exclusive VantageScore volumes (10,000 transactions in Q2) remain tiny relative to FICO's total mortgage inquiry base.

TransUnion (TRU) — Q2 2026 Earnings Call (July 28, 2026)

Relevance: TransUnion is the second major FICO score reseller; FICO mortgage royalties are a significant and growing cost item for TRU, representing a 90 bps drag on FY2026 adjusted EBITDA margins. TRU's Q2 2026 covers the same calendar period as FICO's fiscal Q3 2026.

• Mortgage volumes modestly below expectations: TRU reported mortgage revenue grew 37% in Q2 2026, but volumes came in modestly lower as rates increased during the quarter. Excluding FICO royalties, mortgage growth was 15% vs. inquiries down 7%. TRU has de-risked its H2 2026 assumptions, now projecting low double-digit inquiry declines in H2 — a meaningful deterioration from H1 trends.
• VantageScore at 30% of mortgage inquiries: At the start of 2026, less than 5% of TRU's mortgage credit inquiries included VantageScore; that figure is now closer to 30% across more than 900 lenders and increasing monthly. Most activity remains dual-pulls (VantageScore + FICO), but TRU is beginning to see increased VantageScore-only usage, including for certain mortgages requiring mortgage insurance. VantageScore-only mortgages are appearing in securitization, albeit a small but rapidly growing percentage.
• TRU is “laser focused” on VantageScore adoption: Management described the opportunity as “tremendous” for lenders to get a more predictive score at a substantially lower price. TRU's 2026 guidance continues to assume no benefit from VantageScore adoption, but the momentum gives management “greater confidence in the long-term opportunity.”
• FICO royalties are a growing margin drag: FICO royalties accounted for the entirety of TRU's 90 bps year-over-year adjusted EBITDA margin decline in Q2 2026. For Q3 2026, FICO is expected to be an 80 bps drag on TRU's margin. This confirms FICO's pricing power is flowing through to bureau P&Ls.
• Non-mortgage lending remains healthy: Core non-mortgage financial services revenue grew 8% in Q2, with auto up 8%, credit card and banking up 6%, and consumer lending up 8%. Lenders are “cautiously optimistic” with modest loan growth expected. This is a positive read-through for FICO's software segment, which serves these same lenders.
• Implication for FICO: TRU's data confirms the mortgage volume headwind and VantageScore adoption acceleration that Equifax also flagged. The 30% VantageScore inquiry penetration is higher than FICO management's implied assumption of near-zero share loss, creating a potential negative surprise risk. However, the distinction between dual-pulls (still paying FICO) and exclusive VantageScore (not paying FICO) is critical — and exclusive usage remains very small.

Experian (EXPN LN) — Q1 FY2027 Sales & Revenue Call (July 16, 2026)

Relevance: Experian's Q1 FY2027 covers April–June 2026 (same calendar period as FICO's fiscal Q3 2026). Experian is the third major FICO score reseller and has explicitly stated it is not marking up the FICO score, absorbing the royalty as a margin drag.

• Mortgage volumes slightly higher, revenue up 45–50%: Experian reported mortgage revenue growth in the “high 40s” in Q1 FY2027, with volumes “slightly higher” — a more constructive read than Equifax or TransUnion. Experian expects “something broadly similar the rest of this calendar year,” suggesting the pricing benefit from earlier price rises will sustain through 2026.
• 11 of top 15 mortgage lenders accessing VantageScore 4.0: These lenders collectively represent nearly 30% of the total mortgage market, demonstrating strong interest in VantageScore among large lenders. Experian is not marking up the FICO score and has absorbed the royalty drag in its margin guidance (50 bps organic constant currency margin progression guidance includes the FICO royalty pass-through drag).
• Lending environment “relatively stable”: Experian described macro conditions as “good to okay” with solid growth in bank lending and originations, stable to modestly improving delinquencies, and strong demand for analytics and AI governance solutions. North America Financial Services grew 13% in Q1 FY2027, supported by Ascend Analytics, fraud prevention, and mortgage profiles.
• Competitive dynamics unchanged: Experian CEO Brian Cassin stated “nothing’s changed” in competitive dynamics as of the July 16 call, with the market “structured as it was” — a relatively benign read-through for FICO's software competitive position.
• Implication for FICO: Experian's slightly more constructive mortgage volume commentary (volumes “slightly higher” vs. Equifax/TRU's “below expectations”) may reflect timing differences or geographic mix. The stable lending environment and strong analytics demand are positive for FICO's software segment. The VantageScore adoption data (11 of top 15 lenders) is consistent with the broader bureau narrative.

Peer Read-Through Summary Table

Bottom Line on Peer Read-Throughs: The bureau commentary is net cautious for FICO's Q3 Scores segment. Mortgage volumes were weaker than expected at Equifax and TransUnion (the two largest FICO resellers), and VantageScore adoption accelerated to ~30% of mortgage inquiries — well above what FICO's “zero share loss” guidance implies. The critical distinction is that most VantageScore usage remains dual-pull (lenders still paying for FICO), and exclusive VantageScore volumes remain tiny (~10,000 transactions per Equifax). The non-mortgage lending environment is healthy, which is a positive for FICO's software segment. On balance, the peer data suggests Q3 Scores revenue could come in at or slightly below the $461.6M consensus, while software should be in line to slightly above.

7. Material News & Developments

Key Takeaway: The most important development since Q2 earnings is the accelerating VantageScore adoption in the mortgage market — confirmed by all three bureau peers — which tests FICO management's assertion of zero share loss in FY2026 and is the single biggest overhang on the stock heading into the print.

• July 28, 2026 — TransUnion Q2 2026 Earnings (VantageScore Read-Through): TRU confirmed VantageScore penetration reached ~30% of mortgage inquiries across 900+ lenders, up from <5% at the start of 2026. VantageScore-only mortgages are appearing in securitization. TRU is “laser focused” on driving VantageScore adoption. Implication: Most significant negative read-through for FICO's B2B Scores revenue; however, exclusive VantageScore volumes remain small.
• July 21, 2026 — Equifax Q2 2026 Earnings (Mortgage Volume + VantageScore): EFX reported mortgage originations weaker than expected (rates at 6.6%), VantageScore volumes up ~3x vs. Q1, and ~100 lenders using VantageScore exclusively. EFX stated FICO's $66 funding fee model is “commercially and legally problematic” under RESPA. Implication: Challenges FICO's Direct Licensing Program pricing strategy; mortgage volume headwind confirmed.
• July 16, 2026 — Experian Q1 FY2027 Revenue Call: EXPN reported mortgage revenue up high 40s% with volumes “slightly higher,” a more constructive read than EFX/TRU. 11 of top 15 mortgage lenders accessing VantageScore 4.0. Experian not marking up FICO score. Implication: Slightly positive on volumes; confirms VantageScore adoption trend.
• July 15, 2026 — FICO Announces Q3 FY2026 Earnings Date: FICO confirmed July 29, 2026 after-market-close earnings date with 5:00 PM ET conference call. No pre-announcement or guidance update issued. Implication: Absence of pre-announcement is neutral; management has historically not pre-announced.
• July 2, 2026 — UBS Raises Price Target on FICO: UBS raised its price target from $1,250 to $1,270 while maintaining a Neutral rating (analyst: Kevin McVeigh). Implication: Modest positive; UBS remains the most cautious major firm on the stock.
• June 9, 2026 — Needham Reiterates Buy, $1,650 PT: Needham (analyst: Kyle Peterson) reiterated Buy with $1,650 price target. Implication: Constructive; Needham is one of the more bullish sell-side voices on FICO.
• May 19–22, 2026 — FICO World 2026 (Orlando): Annual customer conference showcased FICO Platform's agentic AI capabilities, 137 AI-based patents, and 150+ clients using the platform across multiple connected use cases. All ten of Experian's largest strategic clients are now live on Ascend (Experian's analytics platform, a FICO competitor). Implication: Positive for platform ARR narrative; stock rallied ~14% in the surrounding week.
• May 19, 2026 — Bank of America Lowers PT to $1,400 (Buy): BofA (analyst: Curtis Nagle) reduced price target from $1,550 to $1,400 while maintaining Buy. Implication: Reflects near-term caution on mortgage volumes and VantageScore risk, but conviction on long-term thesis maintained.
• April 28, 2026 — Q2 FY2026 Earnings Beat & Guidance Raise: Revenue $691.7M (+9.1% vs. consensus), non-GAAP EPS $12.50 (+12.9% vs. consensus). FY2026 guidance raised to $2.45B revenue and $40.45 non-GAAP EPS. Record quarterly share repurchase of $605M (484,000 shares at avg. $1,251). Implication: Established the high bar that Q3 must now clear; buyback signals management confidence at current prices.
• April 22, 2026 — FHFA Formally Approves FICO 10T and VantageScore 4.0: FHFA activated the use of VantageScore for over 20 mortgage lenders, marking a significant milestone for score competition. FICO 10T historical data release expected summer 2026. Implication: Dual-score system now operational; FICO 10T adoption via Direct Licensing Program still awaiting FHFA sign-off on reseller score calculation.

8. Insider Transaction Activity

Key Takeaway: No open-market buys or discretionary sells since Q2 earnings — all transactions are RSU vesting-related (Form 4 codes M/F/A), which are routine compensation events and carry no directional signal. The absence of any discretionary insider selling at current prices is mildly constructive, particularly given the stock's ~32% rally since the April 28 earnings date.

Source: SEC Form 4 filings. Open-market buys (code P) and discretionary sells (code S): None filed since Q2 FY2026 earnings (April 28, 2026). All transactions are RSU/MSU vesting events (code M = exercise/conversion, code F = tax withholding, code A = award) — routine compensation mechanics with no directional signal. The CEO's retention of 42,686 shares and the CFO's retention of 2,918 shares post-withholding, combined with the absence of any discretionary selling into the stock's 32% post-earnings rally, is a mild positive signal.

Note on Company Buybacks: While not insider transactions, FICO's corporate buyback activity is highly relevant — the company repurchased $605M in Q2 FY2026 (record quarterly dollar amount) and an additional $170M since April 1 at an average of $1,040/share. Management has described current stock levels as “opportunistic” and is “in the market kind of all the time.” This aggressive buyback posture at prices well below current levels ($1,040 avg. vs. ~$1,336 current) signals strong management conviction in intrinsic value.