Fair Isaac Corporation (FICO) — Earnings Preview

2. KPIs & Consensus Expectations

Key Takeaway: Consensus is a manageable bar given management’s conservative volume assumptions, but B2B Scores revenue is the bigger swing factor — mortgage volume weakness flagged by peers creates downside risk while pricing power provides a floor. Platform ARR is the cleaner, more predictable metric and is expected to continue compounding.

Table 1 — Current Quarter Snapshot (Fiscal Q3 2026, Quarter Ending June 30, 2026)

Source: Visible Alpha Consensus and Actuals Data; FICO Q2 FY2026 Earnings Release and Transcript (April 28, 2026). All consensus figures as of July 28, 2026.

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs)

Total Revenue ($M)

Non-GAAP EPS (Diluted)

Pattern: FICO has beaten consensus on both revenue and non-GAAP EPS in 6 of the last 7 reported quarters, with the sole miss in Q1 FY2025 (December 2024) driven by a softer-than-expected mortgage origination environment; the magnitude of beats has accelerated sharply in recent quarters as mortgage pricing increases took full effect.

Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Management raised full-year FY2026 guidance materially at the Q2 print (April 28) and has not issued any subsequent formal revision; tone remains confident on platform growth and pricing power but deliberately conservative on mortgage volumes for the back half.

Source: FICO Q2 FY2026 Earnings Release and Transcript (April 28, 2026); Visible Alpha Consensus and Actuals Data.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have drifted modestly higher since the Q2 print, with the Street sitting comfortably above management’s conservative guidance on both revenue and EPS — this gap represents cushion rather than risk, as management has a track record of setting beatable bars. Platform ARR estimates have also moved higher, reflecting accelerating confidence in the land-and-expand model.

Estimates have moved modestly higher across all key metrics since the Q2 print, with the Street sitting 4.5–6.8% above management’s FY2026 guidance on revenue and EPS respectively. This gap reflects the market’s view that management’s “conservative volume assumptions” leave meaningful upside optionality, particularly if mortgage rates stabilize or pricing continues to outperform. Platform ARR revisions (+2.4% since the print) are the most encouraging signal, as this metric is less rate-sensitive and reflects durable compounding.

Source: Visible Alpha Consensus and Actuals Data (as-of date May 5, 2026 for baseline; latest as of July 28, 2026). FICO Q2 FY2026 Earnings Transcript for guidance figures.

5. Stock Performance

Key Takeaway: FICO’s +32% rally since the April 28 earnings print has been driven by a combination of multiple re-rating (NTM P/E expanded from ~21x to ~24x) and modest estimate revisions upward — the stock has significantly outperformed both IGV (+8%) and the S&P 500 (+4%) over the same period, suggesting sentiment has improved materially but the stock is not yet pricing in a blowout quarter.

FICO vs. IGV (iShares Expanded Tech-Software ETF) vs. S&P 500 (SPY) — Indexed to 100 at April 28, 2026 (Last Earnings Date). FICO: +32.2%, IGV: +8.0%, SPY: +4.1% through July 27, 2026. Source: Yahoo Finance / Stock Price Data.

Sector ETF: IGV (iShares Expanded Tech-Software ETF) was selected as the benchmark given FICO’s dual identity as an analytics software company with a dominant B2B scoring franchise. IGV captures the software peer group most relevant to FICO’s platform business valuation.

Performance Decomposition: Over the past 3 months, FICO’s +31.8% return has been driven by both multiple expansion (+14.7% on NTM EV/EBITDA from 15.93x to 18.27x) and earnings/estimate revisions. Over the past 12 months, the stock is still down ~12.8%, almost entirely attributable to multiple compression (-41.1% on NTM EV/EBITDA from 31.0x to 18.3x) as the market de-rated the stock amid VantageScore competition concerns and mortgage market uncertainty. The recent recovery suggests the market is beginning to re-price the competitive risk as more manageable than feared.

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

• May 7, 2026: FICO stock surged ~+5.8% on the day, likely reflecting continued positive sentiment from the Q2 beat and guidance raise as the market digested the print.
• May 18–28, 2026: FICO World 2026 conference (May 19–22, Orlando) — stock rallied from ~$1,092 to ~$1,296 (+18.6%) over this period, suggesting positive investor reception to platform innovation showcases and UltraFICO announcements.
• June 3–June 22, 2026: Stock pulled back from ~$1,175 to ~$1,091 (-7.1%), coinciding with broader software sector weakness (IGV also declined) and rising rate concerns flagged by peers at the Baird conference.
• July 1–July 14, 2026: Stock rallied from ~$1,207 to ~$1,300 (+7.7%) before pulling back to ~$1,206 by July 15, likely reflecting pre-earnings positioning and EFX earnings read-through (EFX reported July 21).
• July 21–27, 2026: Stock recovered from ~$1,227 to ~$1,281 (+4.4%) in the week leading into earnings, suggesting modest pre-earnings optimism.

Source: Yahoo Finance / Stock Price Data.

6. Material News & Developments

Key Takeaway: The most important development since the Q2 print is the accelerating VantageScore adoption data from peers — TransUnion reported VantageScore usage jumped from <5% to ~30% of mortgage credit inquiries during FICO’s Q3 period, which is more aggressive than FICO’s own “2% market share” estimate and represents the key overhang heading into the print. However, FICO’s pricing power and the fact that most VantageScore usage is currently “dual-pull” (alongside FICO) limits the near-term revenue impact.

• July 28, 2026 — TransUnion Q2 FY2026 Earnings (Same Day as Preparation): TRU reported mortgage inquiries down 7% in the quarter (FICO’s Q3 period), with 30-year mortgage rates at their highest level of the year (~4.7% on the 10-year Treasury, up ~50 bps YTD). Critically, TRU disclosed VantageScore usage jumped from <5% to ~30% of mortgage credit inquiries across 900+ lenders — though most remains dual-pull alongside FICO. TRU CEO noted “almost everybody is experimenting with it” and some lenders have “an intention to move to a single score vantage.”
• Implication: Near-term revenue impact is limited (dual-pull means FICO still gets paid), but the trajectory of exclusive VantageScore adoption is accelerating faster than FICO’s own guidance assumed.
• July 21, 2026 — Equifax Q2 FY2026 Earnings: EFX reported U.S. mortgage market was “slightly weaker than expected” in Q2 (FICO’s Q3 period) with rates up 30–40 bps from April to ~6.6%. EFX disclosed ~1,200 lenders are pulling free VantageScore alongside paid FICO, with VantageScore volume up ~3x QoQ to 2.2M transactions. EFX CEO dismissed FICO’s proposed “success fee” pricing model as having “no traction” and committed to maintaining $1 VantageScore pricing through end of 2027.
• Implication: Equifax’s aggressive VantageScore pricing commitment through 2027 is a sustained competitive headwind; the dismissal of FICO’s DLP success-fee model is a negative read-through for FICO’s pricing strategy.
• July 15, 2026 — FICO Announces Q3 FY2026 Earnings Date: FICO issued a press release confirming the July 29, 2026 earnings call date. No pre-announcement or guidance update was included, suggesting no material deviation from the April 28 guidance.
• June 2, 2026 — TransUnion at Baird Global Consumer, Tech & Services Conference: TRU CFO Todd Cello confirmed that through mid-May 2026, volumes were “consistent with what we said on the earnings call” and expected to be “at the high end of guidance or above.” He also confirmed FICO “increased pricing for mortgage quite significantly at the end of 2025 for pricing in effect in 2026.”
• Implication: Positive read-through for FICO’s Q3 — stable volumes through mid-May and confirmed pricing increases support the revenue setup.
• June 2, 2026 — Equifax at Baird Global Consumer, Tech & Services Conference: EFX CEO Mark Begor confirmed hard inquiries were running at +2% and that financial institutions were “super strong” with “no change in how they’re originating.” He also noted the mortgage pre-qualification market has shifted to a “1B market” (single bureau pull) “because of FICO pricing,” which is a negative for FICO’s pre-qual revenue but confirms pricing power in the origination stage.
• Implication: Mixed — stable lending volumes are positive, but FICO’s own pricing is driving some reduction in multi-bureau pre-qual pulls.
• April 28, 2026 — FICO Q2 FY2026 Earnings Beat & Guidance Raise: FICO reported Q2 revenue of $692M (+39% YoY) and non-GAAP EPS of $12.50 (+60% YoY), both well above consensus. B2B revenue surged 72% YoY driven by higher mortgage origination score pricing and volume. Platform ARR grew 49% YoY to $349M. Management raised FY2026 guidance to $2.45B revenue and $40.45 non-GAAP EPS. Record quarterly share repurchase of $605M (484K shares).
• Implication: Sets a high absolute bar for Q3 but management’s conservative volume assumptions and the stock’s muted reaction on the day (+0% close) suggest the market was already pricing in a strong print.
• April 22, 2026 — FHFA/GSE Formal Approval of FICO 10T and VantageScore 4.0: FHFA formally activated use of VantageScore for conforming mortgage underwriting, ending FICO Classic’s monopoly. FICO 10T historical data release expected summer 2026. This is the structural event driving the competitive narrative heading into Q3.
• Implication: The key long-term risk event; near-term impact is limited as adoption takes time, but the trajectory of VantageScore adoption (per TRU and EFX data) is accelerating faster than expected.

7. Insider Transaction Activity

Key Takeaway: No open-market insider purchases or discretionary sales were identified in the SEC Form 4 filings for FICO in the period since the April 28, 2026 earnings call. The absence of insider buying at current price levels (stock down ~12% over 12 months) is notable but not alarming given FICO’s aggressive corporate buyback program ($605M in Q2 alone), which effectively substitutes for individual insider signaling. No 10b5-1 plan initiations or Form 144 filings were identified in the search window.

Source: SEC EDGAR Form 4 filings search (April 28 – July 28, 2026). Five Form 4 filings were identified in the SEC EDGAR system for FICO in this period but contained no open-market buy (P) or sell (S) transactions — likely routine equity award grants or vesting events (transaction code A). No 10b5-1 plan initiations or Form 144 filings were identified.

8. Peer Commentaries / Read-Through

Key Takeaway: Peer commentary from Equifax (EFX) and TransUnion (TRU) in the last 60 days paints a mixed-to-negative picture for FICO’s Q3 mortgage volumes (inquiries down 7%, rates at year highs) but confirms FICO’s pricing power and stable non-mortgage lending demand. The most significant new data point is TRU’s disclosure that VantageScore usage has jumped to ~30% of mortgage inquiries — far ahead of FICO’s own “2% market share” estimate — though most remains dual-pull and the near-term revenue impact is limited.

Methodology Note: Only commentary from EFX and TRU made after FICO’s April 28, 2026 earnings call and pertaining to FICO’s fiscal Q3 2026 period (April–June 2026) or current market conditions is included below. Peer guidance or commentary solely about periods beyond FICO’s Q3 (e.g., TRU’s H2 2026 guidance, EFX’s 2027 government contract commentary) has been explicitly excluded.

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

Relevance: EFX’s Q2 2026 (calendar Q2, April–June) directly overlaps with FICO’s fiscal Q3 2026 (April–June). This is the highest-quality read-through available.

U.S. Mortgage Originations / Volumes — Negative Read-Through

• EFX CEO Mark Begor (July 21): “US mortgage revenue was up 25% in the quarter and up 7% ex FICO. This was stronger than our expectations against a weaker than expected US mortgage market from higher interest rates during the quarter. US mortgage rates increased meaningfully with the current 30-year fixed rates up 30 basis points to about 6.6% versus the 6.3% when we gave guidance in April. As a result, we saw overall industry transaction volumes run below our expectations.”
• EFX CFO John Gamble (July 21): “The U.S. mortgage market was slightly weaker than expected in the second quarter, and has shown further weakening over the last several weeks as long-term interest rates have again increased.” He added that guidance reflects “mortgage market originations weaker and down low single digits” for Q3 2026 (EFX’s Q3, which is FICO’s Q4).
• EFX CFO John Gamble (July 21): “Right now, what we have embedded in the guidance is current mortgage rates… I think they’re up on the order of 30 to 40 basis points [from April]. So that’s really what we’ve seen occur while we’re seeing a slowdown in mortgage.”
• FICO Read-Through: Negative. Mortgage origination volumes in FICO’s Q3 period (April–June) were below EFX’s own expectations due to rates rising 30–40 bps from April to ~6.6%. This directly pressures FICO’s B2B mortgage origination revenue, which was the dominant driver of Q2’s 72% B2B revenue surge. However, FICO’s significant pricing increase (effective January 2026) provides a meaningful offset.

VantageScore Adoption — Negative Read-Through

• EFX CEO Mark Begor (July 21): “In April, the FHFA activated use of VantageScore for over 20 mortgage lenders. This was a big milestone to bring score competition to the mortgage industry. While the vast majority of these mortgage lenders have begun using VantageScore, we have also seen a groundswell of VantageScore adoption with about 1,200 additional mortgage lenders pulling our free VantageScore alongside a paid FICO score from Equifax.”
• EFX CEO Mark Begor (July 21): “Our second quarter VantageScore volume is up almost 3x compared to the first quarter. The vast majority of the 2.2 million transactions were pulled by the 1,200 lenders pulling a free VantageScore alongside a FICO score as they drive their adoption of the new VantageScore opportunity.”
• EFX CEO Mark Begor (July 21): “We also have about 100 mortgage lenders… exclusively utilizing VantageScore at our $1 price point for their mortgage originations. Although volumes remain low at about 10,000 transactions in the quarter, we saw significant acceleration as we moved through the tail end of the quarter.”
• EFX CEO Mark Begor (July 21) on FICO’s DLP success-fee model: “We don’t hear or see any traction on that… the idea of charging that consumer $66 for a credit score, which is what FICO is proposing with their closed loan pricing, versus a dollar with a VantageScore or $10 with today’s FICO score pricing, just doesn’t make a lot of sense, which is why there isn’t a lot of traction there.”
• EFX CEO Mark Begor (July 21): Equifax plans to maintain the $1 VantageScore price through end of 2027 to “continue driving VantageScore adoption.”
• FICO Read-Through: Negative. VantageScore adoption is accelerating faster than FICO’s own “2% market share” estimate implied. The 3x QoQ volume increase and 1,200 lenders pulling free VantageScore alongside FICO represents a structural shift in lender behavior. However, the near-term revenue impact is limited as most usage is dual-pull (FICO still gets paid). The dismissal of FICO’s success-fee DLP model is a meaningful negative for FICO’s pricing strategy optionality.

Non-Mortgage Lending / Consumer Credit Demand — Positive Read-Through

• EFX CEO Mark Begor (July 21): “Consumer lending also had another very strong quarter with strong double-digit revenue growth across the portfolio in auto, card, consumer finance, principally due to strong volume growth and new product rollouts.” He added: “The end markets are solid, outside of mortgage, which is a positive.”
• EFX CEO Mark Begor (July 21): “Continued high employment levels have acted to limit more broad-based credit impacts, which gives lenders a confidence to continue originating loans. We have not seen financial institutions increase their portfolio management reviews or decrease consumer credit lines, which are actions they would typically take when they anticipate an economic downturn.”
• FICO Read-Through: Positive. Strong non-mortgage lending volumes (auto, card, consumer finance) support FICO’s B2B Scores revenue in these verticals. Stable lender behavior (no credit tightening) is a positive macro signal for overall score usage.

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

Relevance: TRU’s Q2 2026 (calendar Q2, April–June) directly overlaps with FICO’s fiscal Q3 2026 (April–June). This is the most current and directly comparable read-through, reported the same day as this preview.

U.S. Mortgage Originations / Inquiries — Negative Read-Through

• TRU CEO Chris Cartwright (July 28): “The ten-year Treasury yield is now approaching 4.7%. That’s up roughly 50 basis points from the start of the year. And while this has modestly pressured mortgage activity, impacts across the remainder of our portfolio have been limited.”
• TRU CFO Todd Cello (July 28): “Mortgage revenue grew 37%. Excluding FICO royalties, mortgage growth was 15% versus inquiries, down 7% with outperformance due to pricing actions and non-tribal revenues. Growth was in line with expectations, even as volumes came in modestly lower as rates increased during the quarter.”
• TRU CFO Todd Cello (July 28): “We are looking at where the 30-year is at today, and it is at the highest that it’s been all year. And our guidance for mortgage would contemplate, you know, being at that level and perhaps even maybe being a little bit worse.”
• FICO Read-Through: Negative. Mortgage inquiries were down 7% in FICO’s Q3 period — a direct headwind to FICO’s B2B mortgage origination revenue. The 30-year rate at its highest level of the year as of July 28 suggests the volume headwind persisted through the end of FICO’s Q3. TRU’s own mortgage revenue growth of 37% (including FICO royalties) confirms FICO’s pricing power is a significant offset.

VantageScore Adoption — Negative Read-Through (Most Significant New Data Point)

• TRU CFO Todd Cello (July 28): “VantageScore usage in mortgage was a highlight in the quarter, with a meaningful increase in adoption at the start of the year. Less than 5% of our mortgage credit inquiries included VantageScore. That figure is now closer to 30% across more than 900 lenders and increasing each month. Most activity remains dual pulls with VantageScore and FICO, but we are beginning to see increased VantageScore-only usage, including certain mortgages requiring mortgage insurance.”
• TRU CEO Chris Cartwright (July 28): “Almost everybody is experimenting with it. The efforts are being led by the largest players in the market that have the most financial benefit, and all of the other players that need to calibrate are deeply engaged in doing so, whether that’s updating their risk models for a new score or it’s altering some fields in their software so that they include multiple scores. But this year of experimentation and preparation for faster and scaled adoption of a competing score is happening full stop.”
• TRU CEO Chris Cartwright (July 28): “There are some players in the market that, if they’re not exclusively using VantageScore today… they clearly have an intention to move to a single score VantageScore once they’re through this experimentation and calibration phase.”
• FICO Read-Through: Negative. This is the most significant new data point in the last 60 days. VantageScore’s jump from <5% to ~30% of TRU mortgage inquiries is far ahead of FICO’s own “2% market share” estimate from the April 28 call. The near-term revenue impact is limited (most is dual-pull), but the trajectory of exclusive VantageScore adoption is accelerating and represents a structural long-term risk to FICO’s mortgage pricing power. This will likely be the central question on FICO’s Q3 call.

Non-Mortgage Lending Volumes — Positive Read-Through

• TRU CFO Todd Cello (July 28): “In core non-mortgage financial services, revenue grew 8% with healthy growth across lending types… Credit card and banking rose 6% on lending volume growth and new wins. Lending grew 8% with strong fintech growth and sustained consumer demand. Auto was up 8%, driven by pricing and new wins across our solutions.”
• TRU CEO Chris Cartwright (July 28): “Lenders are cautiously optimistic and anticipate modest loan growth, which is supported by strong consumer credit performance.”
• FICO Read-Through: Positive. Healthy non-mortgage lending volumes (card +6%, consumer lending +8%, auto +8%) support FICO’s B2B Scores revenue in these verticals and partially offset the mortgage volume headwind.

C. TransUnion (TRU) — Baird Global Consumer, Tech & Services Conference (June 2, 2026)

Relevance: Commentary made during FICO’s Q3 period (April–June 2026), providing in-quarter volume and pricing data.

• TRU CFO Todd Cello (June 2): “Through the middle of May right now, the volumes that we talked about on the earnings call at the end of April have continued at that same level. So consistent with what we said on the earnings call, the expectation would be if that continues for the rest of the quarter that we should be at the high end of our guidance or above.”
• TRU CFO Todd Cello (June 2) on FICO pricing: “FICO, a partner of TransUnion and its scoring, increased pricing for mortgage quite significantly at the end of 2025 for pricing in effect in 2026.” He added: “FICO over the last several years has been more aggressive with their pricing” and that FICO’s pricing power is “predominantly in mortgage.”
• FICO Read-Through: Mixed. Stable volumes through mid-May (positive) and confirmed significant FICO mortgage pricing increases effective 2026 (positive for FICO revenue). However, the subsequent EFX and TRU Q2 earnings data shows volumes deteriorated in June as rates rose further.

D. Equifax (EFX) — Baird Global Consumer, Tech & Services Conference (June 2, 2026)

Relevance: Commentary made during FICO’s Q3 period (April–June 2026), providing in-quarter market conditions.

• EFX CEO Mark Begor (June 2): “In the mortgage process, the pre-application or prequalification file has really moved to more of a 1B market, meaning one credit worth is the application process of 3, because of FICO pricing.”
• EFX CEO Mark Begor (June 2): HUD announced it will continue requiring tri-merge pulls: “We think tri-merge is something that is going to be here to stay. We don’t think about it as a threat or a risk going forward.”
• EFX CEO Mark Begor (June 2): “Financial institutions are super strong. They’re operating well. They have strong balance sheets… Really no change in how they’re originating. We haven’t seen them do more portfolio management reviews or credit line decreases.”
• EFX CFO John Gamble (June 2): Hard inquiries running at “plus 2%” as of early June — “our best current view” of the market.
• FICO Read-Through: Mixed. Stable lender behavior and +2% hard inquiries are positive for overall score volumes. The shift to 1B pre-qual pulls “because of FICO pricing” is a negative for FICO’s pre-qual revenue but confirms pricing power in the origination stage. HUD’s tri-merge continuation is a positive for FICO’s origination revenue.

Summary Read-Through Table

Sources: Equifax Q2 2026 Earnings Call Transcript (July 21, 2026); TransUnion Q2 2026 Earnings Call Transcript (July 28, 2026); TransUnion Baird Global Consumer, Tech & Services Conference Transcript (June 2, 2026); Equifax Baird Global Consumer, Tech & Services Conference Transcript (June 2, 2026). All commentary included pertains to FICO’s fiscal Q3 2026 period (April–June 2026) or was made after FICO’s April 28, 2026 earnings call. Peer guidance or commentary solely about periods beyond FICO’s Q3 (e.g., TRU H2 2026 guidance, EFX 2027 government contracts) has been excluded.