Fair Isaac Corporation (FICO) Income Statement

The sequential acceleration from 13.6% to 25.7% within two quarters indicates a sharp uptick in demand, likely tied to increased mortgage and credit origination volumes. This growth appears broad-based, as gross margin expanded concurrently, implying pricing power rather than discount-driven volume. Investors should monitor whether this pace is sustainable given potential cyclicality in lending activity.

The 700 basis point expansion in gross margin over five quarters suggests that FICO is capturing higher value per transaction, likely due to the proprietary nature of its FICO Score. This margin profile is structurally superior to most software peers, indicating limited competitive pressure. However, the sustainability of such margins depends on continued regulatory and market acceptance of its scoring models.

SG&A as a percentage of revenue declined from 26.0% in 2025Q1 to 25.3% in 2026Q3, while R&D remained stable around 8%, indicating that FICO is scaling efficiently. The operating margin expanded to 53.8% in 2026Q3, up from 40.8% in 2025Q1, which suggests that incremental revenue is flowing to the bottom line at a high rate. This leverage is a key driver of EPS growth, which has outpaced revenue growth consistently.

SBC as a percentage of revenue increased from 7.8% in 2025Q3 to 7.8% in 2026Q3, remaining stable, but the absolute growth is notable. R&D spending grew only 13.8% year-over-year, below revenue growth, suggesting that FICO is not aggressively reinvesting in innovation. This cost control supports margin expansion but may limit future product development.