Fair Isaac Corporation

Transcription

1 Fair Isaac Corporation Make Every Decision Count Jefferies 2013 Global Technology, Media and Telecom Conference May 7, Fair Isaac Corporation

2 Safe Harbor Some of the statements made by us during this meeting, including statements concerning our expectations about future operations and financial results, are forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including those risks and uncertainties described from time to time in Fair Isaac s SEC reports, including its annual report on Form 10-K for the year ended September 30, Product roadmaps and similar marketing materials should be considered forward looking and subject to future change at FICO s discretion. Future functionality, features or enhancements as shown are FICO s current projections of the product direction, but are not specific commitments or obligations Fair Isaac Corporation. Confidential.

3 Key Takeaways Business model expands earnings Drive revenue Manage expenses Focus on free cash flow The future is promising Applications and Tools businesses delivered 9% growth FY12/FY11, developing further traction as new products ship Scoring business recovering as economic conditions improve Acquisitions and internal investments extend addressable market and fuel growth Proper operating plan is in place Focus on customers priorities: market segments & products Drive innovation Tight execution Fair Isaac Corporation. Confidential.

4 FICO Products are Market Leaders #1 credit risk score Credit Risk FICO Score Standard measure of US consumer credit risk, used by lenders, rating agencies and secondary market Powers 10 billion credit decisions a year, including 75% of all US mortgage loans Fraud Falcon Fraud Manager #1 credit fraud solution Protects 2.5 billion cards worldwide Customer Management TRIAD Customer Manager #1 credit account management system Used to manage 65% of card accounts worldwide Decision Automation Blaze Advisor business rules management system #1 ranking by business rules management system by industry analysts, publications Fair Isaac Corporation. Confidential.

5 Healthy Growth Prospects: Strong Market Position & Ample Room for Share Gain SubSegment Market Size Market Growth FICO Share FICO Rank Fraud $1B 11% 11% #1 Customer Management $530M 6% 16% #1 Tools $300M 11% 22% (rules) #2 Collections & Recovery $380M 7% 12% #2 Originations $1.3B 7% 4% #5 Marketing $1.5B 4% 3% #7 Insurance $1.0B 4%.5% #5 Scores $800M (Worldwide) 3% 90+% (N.A.only) #1 (N.A. only) Fair Isaac Corporation. Confidential.

6 Acquisitions expand addressable market Entiera SaaS-based customer dialogue management software Industry diversification into Retail Adeptra SaaS-based mobile customer engagement software Industry diversification into multiple verticals CR Software Industry diversification into multiple verticals Flexible, low-cost technology integration Infoglide Entity resolution and social network analysis Fair Isaac Corporation. Confidential.

7 Innovation expands addressable market Access to FICO solutions in the cloud in SaaS mode Easier to access, deploy and upgrade Ability to build own solutions in the cloud Advanced tools allow Big Data analytic components, rapid application development and deployment Support of Open Source and Standards Tools and frameworks accelerate time to market Creation of Analytic Marketplace Availability of third-party applications that improve Decision Management and complement FICO applications Fair Isaac Corporation. Confidential.

8 Financial Summary Application & Tools revenues are growing Strong product line-up; resumption of corporate I/T spending 2012 revenue growth of 11% Scores revenues have stabilized US macroeconomic trends & FICO innovation drive Scores volumes & revenues 2012 revenue growth of 4% Recurring revenue represents ~ 70% FICO protects highly-resilient earnings through strong financial discipline & free cash flow FY13 Guidance Revenue: $760 $770 M Net Income: GAAP -- $100 M Non-GAAP -- $128M EPS: GAAP -- $2.80 Non-GAAP -- $ Fair Isaac Corporation. Confidential.

9 Key Operating Trends $ in Millions $800 $700 $600 $500 $400 $300 $200 $100 $0 Revenue $605.6 $619.7 $676.4 $760.0 FY10 A FY11 A FY12 A FY13 G $ in Millions $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 Net Income Non-GAAP $128.0 $114.0 $95.7 $84.5 $100.0 $92.0 $64.5 $71.6 FY10 A FY11 A FY12 A FY13 G $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Earnings Per Share Non-GAAP $3.60 $3.16 $2.40 $1.88 $2.55 $2.80 $1.43 $1.80 FY10 A FY11 A FY12 A FY13 G Fair Isaac Corporation. Confidential.

10 Balance Sheet Strong with Low Leverage Fair Isaac Corporation. Confidential.

11 Excellent Financial Health FICO continues to enjoy excellent financial heath Solidly profitable: $136M in pre-tax profit FY-12 Strong cash flow: $101M in free cash flow FY-12 Strong balance sheet: $149M cash ($200M in available credit) Modest debt: $504M gross debt outstanding Solid business model High recurring revenue (~70%) Profitable (28-30% Non-GAAP Operating Margin) High incremental margins Fair Fair Isaac Isaac Corporation. Confidential. Confidential.

12 Regulation G Disclosures (Unaudited) Current Non-GAAP Measures Fiscal Year Quarter Ended Quarter Ended Fiscal Year Quarter Ended Quarter Ended Operating Income 2013 March 31, 2013 December 31, September 30, 2012 June 30, 2012 Operating income, as reported $ 76,200 $ 33,206 $ 42,994 $ 168,358 $ 40,922 $ 37,168 Add back pre-tax items: Amortization of intangible assets 6,976 3,604 3,372 6,944 2,059 1,465 Restructuring and acquisition-related 3,289-3,289 5,125 5,125 - Stock-based compensation expense 12,245 6,413 5,832 21,229 5,763 6,081 Non-GAAP operating income (segment operating income) $ 98,710 $ 43,223 $ 55,487 $ 201,656 $ 53,869 $ 44,714 Revenues $ 369,345 $ 179,325 $ 190,020 $ 676,423 $ 186,075 $ 160,478 Non-GAAP operating margin 27% 24% 29% 30% 29% 28% Net Income Net income, as reported $ 41,916 18,495 $ 23,421 $ 92,004 $ 21,246 $ 20,749 Add back items, net of tax: Amortization of intangible assets 4,731 2,467 2,265 4,607 1, Restructuring and acquisition-related 2,209-2,209 3,345 3,345 - Stock-based compensation expense 8,306 4,389 3,917 14,074 3,762 4,030 Non-GAAP net income $ 57,163 $ 25,351 $ 31,812 $ 114,031 $ 29,697 $ 25,750 Revenues $ 369,345 $ 179,325 $ 190,020 $ 676,423 $ 186,075 $ 160,478 Non-GAAP net margin 15% 14% 17% 17% 16% 16% Diluted Earnings per Share Diluted earnings per share, as reported $ 1.15 $ 0.51 $ 0.65 $ 2.55 $ 0.60 $ 0.59 Add back items, net of tax: Amortization of intangible assets Restructuring and acquisition-related Stock-based compensation expense Non-GAAP diluted earnings per share $ 1.57 $ 0.69 $ 0.88 $ 3.16 $ 0.84 $ 0.73 Reconciliation to Adjusted EBITDA Operating income, as reported $ 76,200 $ 33,206 $ 42,994 $ 168,358 $ 40,922 $ 37,168 Add back pre-tax items: Amortization of intangible assets 6,976 3,604 3,372 6,944 2,059 1,465 Depreciation 9,456 4,855 4,601 14,605 4,935 3,042 Stock-based compensation expense 12,245 6,413 5,832 21,229 5,763 6,081 Restructuring and acquisition-related 3,289-3,289 5,125 5,125 - Adjusted EBITDA $ 108,166 $ 48,078 $ 60,088 $ 216,261 $ 58,804 $ 47,756 Revenues $ 369,345 $ 179,325 $ 190,020 $ 676,423 $ 186,075 $ 160,478 Adjusted EBITDA as a percent of revenues 29% 27% 32% 32% 32% 30% 12 Reconciliation To Free Cash Flow Net cash provided by operating activities $ 68,952 $ 40,224 $ 28,728 $ 129,746 $ 23,338 $ 22,932 Reduced by cash flow items: Capital expenditures 17,123 8,110 9,013 25,483 5,867 6,252 Dividends paid 1, , Free cash flow $ 50,413 $ 31,399 $ 19,014 $ 101,459 $ 16,779 $ 15,995 Revenues $ 369,345 $ 179,325 $ 190,020 $ 676,423 $ 186,075 $ 160,478 Free cash flow as a percent of revenues 14% 18% 10% 15% 9% 10% 2013 Fair Isaac Corporation. Confidential.