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Edited Transcript of FICO earnings conference call or presentation 4-Nov-19 10:00pm GMT

Q4 2019 Fair Isaac Corp Earnings Call

MINNEAPOLIS Nov 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Fair Isaac Corp earnings conference call or presentation Monday, November 4, 2019 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Michael I. McLaughlin

Fair Isaac Corporation - Executive VP & CFO

* Steven P. Weber

Fair Isaac Corporation - VP of IR & Treasurer

* William J. Lansing

Fair Isaac Corporation - President, CEO & Director

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Conference Call Participants

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* Brett Richard Huff

Stephens Inc., Research Division - MD

* Jeffrey P. Meuler

Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst

* Manav Shiv Patnaik

Barclays Bank PLC, Research Division - Director & Lead Research Analyst

* William Arthur Warmington

Wells Fargo Securities, LLC, Research Division - MD & Senior Equity Analyst

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Presentation

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Operator [1]

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Greetings, and welcome to the Fair Isaac Corporation quarterly earnings call. (Operator Instructions) As a reminder, this conference is being recorded today, Monday, November 4, 2019.

I would now like to turn the conference over to Steve Weber. Please go ahead.

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Steven P. Weber, Fair Isaac Corporation - VP of IR & Treasurer [2]

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Thank you, Dave. Good afternoon, everyone, and thank you for joining FICO's Fourth Quarter earnings call. I'm Steve Weber, Vice President of Investor Relations; and I'm joined today by our CEO, Will Lansing; and our CFO, Mike McLaughlin.

Today, we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison to the prior quarter in order to facilitate understanding of the run rate of our business.

Certain statements made in this presentation may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many uncertainties that could cause actual results to differ materially. Information concerning these uncertainties is contained in the company's filings with the SEC, in particular, in the risk factors and forward-looking statements portions of such filings. Copies are available from the SEC, from the FICO website or from our Investor Relations team.

This call will also include statements regarding certain non-GAAP financial measures. Please refer to the company's earnings release and Regulation G schedule issued today for a reconciliation of each of these non-GAAP financial measures to the most comparable GAAP measure. The earnings release and Regulation G schedule are available on the Investor Relations page of the company's website, fico.com, or on the SEC's website at sec.gov. A replay of this webcast will be available through November 4, 2020.

And now I'll turn the call over to Will Lansing.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [3]

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Thank you, Steve. I'm pleased to report we delivered another very solid quarter, which capped off a remarkable fiscal 2019. In our fourth quarter, we reported revenues of $305 million, an increase of 19% over the same period last year. For the full fiscal year, we recorded $1.16 billion of revenue, up 16% from 2018. We delivered $55 million of GAAP net income, up 67%, and GAAP earnings of $1.80 per share, up 69%. On a non-GAAP basis, the $2.01 earnings per share was up 50% from last year, and we delivered free cash flow growth as well, up 69% from fiscal '18.

I'm particularly pleased with the breadth of strength in our business. Our Scores business has been growing very well for the past several years, but we were also able to deliver double-digit growth in our software business this year. We'll have some difficult comps in software next year as we project less upfront license and more ratable revenue, but we're steadily building a growing stream of predictable recurring revenue.

In our Applications segment, we had a particularly strong year with our Fraud and Compliance Solutions, with both up double-digit over the previous year. We delivered 8% growth overall in the segment, which had transactional growth of 7%.

In our Decision Management segment, we're validating our strategic vision with financial results. We delivered our largest DMS revenue quarter ever, up 41% from last year's fourth quarter, and the segment was up 34% for the full year versus fiscal 2018. The bookings were also good. We signed $61 million in new DMS deals this quarter, up 152% from the same quarter last year. For the full year, we signed $157 million of new DMS deals, up 90% versus last year.

These solutions are best-in-class, and we're more convinced than ever that there is a significant demand in the marketplace for analytics-driven decisioning software.

Overall, our software business performed very well, with total annual revenue up 11%. We remain committed to delivering more of our products in the cloud, with full year SaaS revenues increasing 12% and SaaS bookings up 24%.

In our Scores business, we had another very successful year. Scores were up 30% in the quarter versus the prior year, and up 25% for the full year. On the B2B side, strong volumes, coupled with our strategic pricing, drove quarterly revenues up 40% over the prior year. For the full year, B2B revenues were up 34%. Our B2C revenues were up 7% versus the Q4 2018 and for the full year. We continue to see a positive macro environment for Scores.

In next year's guidance, which I'll discuss later, we expect the Scores business to grow high single digit, which includes some volume and regular pricing increases, but does not include any strategic pricing increases. We plan to implement some strategic pricing, as we've done in the past, but are not including it in our guidance because it's difficult to estimate the timing and magnitude.

As we look to 2020, we're excited about the many opportunities ahead for us and how we can refine our business model to deliver increased operating leverage. Our transition to a platform-based cloud-first business has involved several years of heavy investment. We developed a goal of having a robust cloud-based decisioning platform that would enable us to dramatically scale our decisioning software business, and we've been able to do that without significant disruption to our income statement, as we've shifted from upfront license to ratable cloud revenue. We remain focused on accelerating revenue growth, while beginning to increase focus on our software margins.

To accomplish this, we're doing 2 things. First, we're improving our cost structure. As we've grown our cloud business, we're now in a position to look for efficiencies that can be gained from the scale we've reached. We are relentlessly focusing on driving costs out where we can so that we can improve our margins and still pass savings on to our customers. We'll do this through reducing development costs, increasing standardization and evolving our architecture to make it as efficient as possible.

Second, as we've done in the past, we're continually looking at our business and asking ourselves if there are ways to be more efficient and reduce nonessential costs. This reengineering effort is an essential part of any well-run business and something we do on a regular basis. The cost savings can either be passed through to the bottom line or fund important investments in other parts of the company. As always, we strive to be good stewards of these assets and see great opportunities ahead.

I'll talk more about our outlook for 2020, but first, let me turn the call over to Mike for further financial details.

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Michael I. McLaughlin, Fair Isaac Corporation - Executive VP & CFO [4]

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Thanks, Will, and good afternoon, everyone. As Will said, we had a solid finish to another terrific year, exceeding both our revenue and net income guidance. Revenue for the quarter was $305 million, an increase of 19% over the prior year. Our full year revenue of $1.16 billion was up 16% over last year.

Bringing our revenue into our reported segments. Applications revenues were $150 million, up 8% versus the same period last year. Full year revenues for Applications were $605 million, up 7% from last year. Increase in full year revenue was driven by higher usage-based volumes and increased term license sales, which included 2 large multiyear license renewals that were recognized as upfront revenue.

In our Decision Management Software, or DMS segment, Q4 revenues were $39 million, up 40% over the same period last year. Full year DMS revenues were $134 million, up 34% from FY '18. This revenue increase was due to limited -- due to increased license and services sales as well as increased volumes in our usage-based contracts. And, as Will pointed out, DMS bookings were $61 million this quarter, up 152% from the previous year.

Finally, our Scores segment revenues were $116 million, up 30% from the same period last year. B2B was up 40% over the same period last year, and B2C revenues were up 7% from the same period last year. For the full year, Scores revenues were $421 million, up 25% from last year.

In terms of geographic distribution, this quarter, 75% of total revenues were derived from our Americas region. Our EMEA region generated 17%, and the remaining 8% was from Asia Pacific. Recurring revenues derived from transactional and maintenance sources for the quarter represented 74% of total revenues. Consulting and implementation revenues were 16% of total revenue, and license revenues were 10% of total revenue. SaaS revenues were $270 million for the year, up 12% from 2018.

The fourth quarter is typically FICO's strongest bookings quarter, and this year was exceptionally strong. We had record bookings in Q4 of $160 million, up 20% from the previous year. Those bookings generated $25 million of current period revenues, a 15% yield. Full year bookings of $482 million represents a 10% increase from last year. SaaS bookings were $189 million for the year, up 24% from 2018.

As we mentioned last quarter, we were previously running behind our expectations for full year bookings, but we managed to catch up this quarter and finish the year as expected. The back-end loading of the bookings will have a timing impact on some revenues as they often take a few quarters for our solutions to go live.

Bookings at FICO continue to be highly variable from quarter-to-quarter and they historically have some seasonality. We expect to see good growth in bookings for the full year 2020, but consistent with typical seasonality, we expect Q1 2020 bookings to be down from Q4 2019.

On the expense side of the ledger, our expenses totaled $235 million this quarter, up $7 million from the prior quarter due to increased personnel costs, data center costs and marketing expense. Our non-GAAP operating margin, as shown in our Reg G schedule, was 30% for both the quarter and the full year. We delivered non-GAAP margin expansion of 400 basis points for the full fiscal year.

Breaking down the income statement to net income and taxes, GAAP net income for the quarter was $55 million, up 67% from the prior year. Our non-GAAP net income was $61 million for the quarter, up 48% from the same quarter last year. For the full year, GAAP net income was $192 million, including $31 million in reduced tax expense from excess tax benefits. Non-GAAP net income was $228 million, up 33% from the prior year.

The effective tax rate for full year 2019 was 11%, including $31 million of reduced tax expense from excess tax benefits recognized upon the settlement or exercise of stock awards. We expect our 2020 recurring tax rate to be approximately 26% to 27% compared with 26% in FY '19, and that's before an estimated excess tax benefit of about $25 million. The resulting net effective tax rate is estimated to be about 16% to 17%, all-in.

Free cash flow for the quarter was $90 million compared to $53 million in the same period last year. For the full year, free cash flow was $236 million, up 23% from last year's $192 million. As you can see in our prior quarter results, FICO's quarterly free cash flow can vary considerably and has some seasonality, primarily as a result of timing of receipts as well as payment of year-end incentive compensation.

Turning to the balance sheet. At the end of the quarter, we had $106 million in cash; this is up $28 million from last quarter due to cash generated from operations, partially offset by $50 million of share repurchases. Our total debt now stands at $830 million with a weighted average interest rate of 4.5%.

Turning to return of capital. We bought back 146,000 shares in the fourth quarter at an average price of $343 per share. For fiscal 2019, we repurchased a total of 926,000 shares at an average price of $247 per share, for a total of $229 million spent. At the end of September, we had about $220 million remaining on our current repurchase authorization.

Finally, before I turn the mic back over to Will, I would like to remind everyone of FICO's capital allocation and return of capital philosophy, and provide guidance for the year. Our capital allocation principles are simple: maintain a lean cash balance; carry a prudent amount of debt; invest in opportunities that we believe will deliver returns well in excess of our cost of capital; and return the remaining dollars to shareholders through stock buybacks. Put simply, we strive to run a tight ship and use all the cash that we don't need to buy our own stock.

Looking into FY 2020, we believe our cash balance is at an acceptable level, and we are comfortable with our current debt balance. Therefore, barring any spending on M&A, you should expect us to use approximately 100% of our free cash flow to buy back stock.

Of course, the actual amount we spend on buybacks in any given quarter may go up or down based upon free cash flow generation, opportunities that may arise for M&A and overall market conditions. But over the course of the year, we plan to spend essentially all of our free cash flow that we don't use on M&A on buying back our stock. Importantly, the share count underlying our EPS guidance, which Will will go through in a moment, is based upon the assumption that we buy back stock in equal amounts each quarter at an average price equal to today's stock price. Our actual share count will inevitably vary from what we're assuming today due to movements in the stock price, actual stock-based compensation grants and other factors, but we wanted to lay out clearly the assumptions behind our EPS calculation.

With that, I'll turn it back over to Will for his thoughts on FY '20.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [5]

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Thanks, Mike. We're speaking to you today from FICO World, which is our global decisioning conference held this week in New York. More than 1,000 professionals are here with us from 60 countries to discuss decision management innovations, artificial intelligence, machine learning, analytic innovation, fraud solutions, cyber risk and growth strategies. This sold-out event is an invaluable chance for us to meet with our customers, to demonstrate our best-in-class solutions and help them optimize and automate their most difficult decisions.

As we move into fiscal '20, I'm pleased with the progress we've made and excited for what lies ahead. The investments we've been making on the software side have been leading to growth in bookings and recurring sustainable revenue. On the Scores side, the business is stronger than ever, and we continue to drive value out of these incredible assets.

With all of this in mind, we're providing the following guidance for fiscal '20. We are guiding revenues of approximately $1.245 billion, an increase of about 7% versus fiscal '19. We are guiding GAAP net income of approximately $204 million, up 6% versus 2019; GAAP earnings per share of approximately $6.75; non-GAAP net income of $251 million; and non-GAAP earnings per share of $8.30.

I'll now turn the call back over to Steve, and we'll take Q&A.

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Steven P. Weber, Fair Isaac Corporation - VP of IR & Treasurer [6]

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Thanks, Will. This concludes our prepared remarks, and we're now ready for your questions. Operator, please open the lines.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Manav Patnaik with Barclays.

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Manav Shiv Patnaik, Barclays Bank PLC, Research Division - Director & Lead Research Analyst [2]

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Just the first question. Will, I think in your comments, you mentioned that the 2020 guidance assumes high single-digit for Scores. I was wondering if you could just give us some color on the software piece of it. And Mike, you talked about the seasonality on the booking side. If you could just elaborate on that a little bit.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [3]

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Yes, I'll make a comment and turn it over to Mike. We see high single digit for Scores, that's right. And then software will be a little below that. And that's mostly because of some revenue recur -- some revenue that we were forced to take upfront license revenue in 2019, which is going to result in difficult comps for next year. So if you normalize all that, we're headed for software growth on the order of 7%, which is completely consistent with what we actually grew.

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Michael I. McLaughlin, Fair Isaac Corporation - Executive VP & CFO [4]

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Yes. And I'd add, if you want to think about the breakout between the projected Scores growth and software growth, overall, 7% software growth is probably about 0.5% less than that. That's more precise than it will end up being, of course. And Scores growth is probably 1% higher than the average of the 2.

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Manav Shiv Patnaik, Barclays Bank PLC, Research Division - Director & Lead Research Analyst [5]

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Okay, got it. And then just from the cloud perspective, maybe I missed it. Can you just remind us the percentage of your business on the growth rate? And just a quick comment on the rollout of Falcon on the cloud as well?

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Michael I. McLaughlin, Fair Isaac Corporation - Executive VP & CFO [6]

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Sorry. Could you repeat the question? I didn't quite get the first part?

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Manav Shiv Patnaik, Barclays Bank PLC, Research Division - Director & Lead Research Analyst [7]

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Yes, the percentage, the percentage of your revenues that are now on the cloud and what that's growing at?

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Michael I. McLaughlin, Fair Isaac Corporation - Executive VP & CFO [8]

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Well we have $270 million of SaaS revenue, which is equivalent to -- which is equivalent to cloud, and you can do the percentage yourself. It's growing at -- in the teens to low-20s percentages quarter-to-quarter, and we expect that to continue to grow, as strategically, we shift clients to the platform that we're building.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [9]

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And then your question on Falcon X. Falcon X is on track. So we actually have Falcon available in the cloud now. But in terms of getting Falcon onto the platform, what we call Falcon X, that's going to take until well into 2020. I mean, we'll have launched it earlier, but the full robust Falcon X will be later on.

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Operator [10]

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The next question comes from the line of Bill Warmington with Wells Fargo.

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William Arthur Warmington, Wells Fargo Securities, LLC, Research Division - MD & Senior Equity Analyst [11]

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And congratulations on the strong bookings at $160 million, I think the previous high was a couple of years ago at $146 million, at least that's what I'm showing. So I had a question for you on the deal distribution. It looked like another record point was the 25 deals between $1 million and $3 million. And I wanted to know if you could talk a little bit about what verticals you're seeing success in? And how the -- what changes you've made to the sales force configuration, if any, that are driving deals in that segment of the market, which seems to be emerging as your sweet spot?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [12]

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So we are -- first, verticals, so it's still predominantly financial services, as it has always been. But we're getting increasing success in telco and auto. And so we continue to work deals there.

In terms of the sales force configuration, we are adding domain expertise for some of these non-financial services verticals. So we have a telco group now, we have an auto group. And so we're going at it that way.

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Michael I. McLaughlin, Fair Isaac Corporation - Executive VP & CFO [13]

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And Bill, this is Mike. I can give you the specific deal size numbers for this quarter. It happened to be 33 deals over $1 million, and 9 of which of those were over $3 million.

And I'll circle back and answer Manav's question about the seasonality of the bookings. I neglected to do so earlier. If you look at quarterly booking trends for the last couple of years, you will see that typically sort of high-teens to 20% of the bookings occur in the first quarter, and it ramps throughout the year to be almost 30% in the fourth quarter, again, typically. Bookings are variable for FICO, as you know. So we're not making a specific prediction about what they'll be in the first quarter, but seasonally, we would expect them to taper off as usual.

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William Arthur Warmington, Wells Fargo Securities, LLC, Research Division - MD & Senior Equity Analyst [14]

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Okay. And then on the software margins, the fiscal 2020 guidance would imply another heavy year of investment in the software business, although this is the first time in a while I've heard you talk about putting on some cost efficiencies and focusing increasingly on cost on the software margin side. So is 2020 potentially the year that we see the growth in the expenses in the software business start to slow? And -- or is that more of probably a 2021 event?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [15]

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I think that we have an effort in that direction, but 2021 is a safer bet. The way we think about that one is we have -- as we do more and more cloud offering, that carries with it higher cost. And so that's a thing to work against. But the flipside of that is, as we have more scale in cloud, our unit costs go down. And so we're busy trying to identify where in our cloud infrastructure there's savings to be had that come from scale. And so the 2 offset each other a little bit. It's another year of investment, that's true. But at the same time, we're trying to manage expenses as tightly as we can, because we'd love to see either additional cash freed up for investment or returned to shareholders. So we'll see how this effort goes, but we're focused on it without making a commitment to changing the margins.

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William Arthur Warmington, Wells Fargo Securities, LLC, Research Division - MD & Senior Equity Analyst [16]

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Okay. And then I want to check in on the CCS business. I know a few quarters back, there have been a couple of clients who had left, and then some of the clients had come back, and you had referenced some strong unit volumes in the quarter. And so that often ties to CCS, but not necessarily. So I just wanted to ask for some color there.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [17]

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CCS is business as usual. It's a healthy business. We did lose some business, more commodity-like business recently. But the business is generally strong.

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Michael I. McLaughlin, Fair Isaac Corporation - Executive VP & CFO [18]

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Yes, there's -- in terms of the growth that we're projecting, as you would expect, we -- DMS should continue to grow at much higher rate than the projected average and apps will go back down to a more normalized rate of low single-digit growth as we move clients on the platform for strategic reasons. Within that, there's nothing that really stands out, at least to me, in terms of puts and takes around the product family that we expect to be any different than the past.

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William Arthur Warmington, Wells Fargo Securities, LLC, Research Division - MD & Senior Equity Analyst [19]

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Got it. Well, last one for me, if I could just ask for an update on the UltraFICO Score and how that's doing?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [20]

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Yes, UltraFICO is -- it's in test, it's in pilot with customers, and we'll see where it goes. Our plan is to get to kind of a more full-scale launch later in the year. It's still on track. So far, early returns, we are happy with the results. And we're seeing improvements in our ability to predict.

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Operator [21]

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Next question comes from Brett Huff with Stephens.

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Brett Richard Huff, Stephens Inc., Research Division - MD [22]

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Can you talk a little bit about, in the guidance, you noted that there -- I think, correct me if I'm wrong, that you're assuming volume increases and then sort of the normal price increases that you roll through most years, but not including any of the strategic or special price increases. Two parts: one, can you tell us how the auto price increases are going? I know you meant -- used the word feather in, to kind of talk about those. Did that -- did they feather in more this quarter? Is that where we saw the acceleration in B2B? Kind of where are we in that penetration or whatever you want to call it?

And then as we look into next year, look at the fiscal '20, is there a specific vertical within the scoring business that you're going to focus on? I think there's -- you maybe talked about card and things like that.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [23]

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So with auto, it's gone very smoothly and not surprisingly, because we spent a lot of time thinking about where and how to strategically reprice. I would say that the impact is not fully felt by any means. We're just starting to see it come in. So again, we're still not certain on the timing, but it's not reflected in the current numbers.

With respect to other strategic areas, if you look at our Scores business, we have mortgage, we have auto and then almost everything else is in, one way or another, credit card-related, we have account management and prescreen and prequal and it's quite a large portfolio of different kinds of things. And so it's not as simple as just saying, "Oh, we raised prices in X." It's definitely a case of us being very surgical in our approach and identifying pockets in that portfolio that can -- that are basically demand-inelastic and can handle a little bit more price. And so it's not as easy to describe this time around. But the potential is very much there.

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Brett Richard Huff, Stephens Inc., Research Division - MD [24]

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Okay. And then can you talk a little bit about the homogenization of the platform? I think 1 example that you gave is that the FICO -- or the Falcon X is in the cloud, I think on AWS, but maybe not fully on your common platform yet. Is that -- where are we in sort of moving everything to that common platform, I think using kind of the underlying DMS infrastructure?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [25]

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Yes, great question. As you know, we have half a dozen major franchises. And 3 of them are moved to the platform. So originations is now on the platform, and Strategy Director, which is the successor to TRIAD, it is now on the platform. Blaze, our rules engine, is now on the platform. So a number of our major solutions are there. The harder ones are Falcon and Debt Manager, Collection and Recovery and, to a lesser extent, CCS. And so where Falcon is definitely the highest priority, and we have a very strong team, large team working on moving Falcon from just being in the cloud to our cloud-ready Falcon X platform-based product. CCS is not as far along, but the interconnections with the platform are there. And so that's less visible. And Debt Manager is a very complex code base. And so it may remain a separate platform. We may find a way to bring it together. We will make it interoperable one way or another, but that's still under review. So I can't promise that we'll have 100% of our major solutions on the platform in 12 months, but we're almost there.

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Brett Richard Huff, Stephens Inc., Research Division - MD [26]

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So that was going to be kind of my follow-up question on that one, on the timing. I think the question was asked before, "a safer bet" to think about fiscal '21 as margin improvement. Is that tied to the comment you just made, you don't want to promise 12 months, but maybe a little bit beyond that? Are those -- am I putting the dots together there correctly?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [27]

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Yes. I mean there's no question that when we have more of our business on the platform, the economics are going to improve. That's the whole idea here. And frankly, it should go along with being able to pass some savings to customers. I mean when we have the platform in its full form, the economics should be good for us and good for our customers.

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Operator [28]

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(Operator Instructions) Next question comes from the line of Jeff Meuler with Baird.

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Jeffrey P. Meuler, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [29]

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In terms of what's assumed in the Scores revenue guidance, is it basically the typical mid-single-digit volume growth that you assume? And then you have the auto pricing effect, especially in Q1 until it's anniversary-ed? Or just any other call-outs? And I guess the other piece I'd be wondering on is if there's a mortgage market assumption?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [30]

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Yes, it is. It is the kind of standard price increases, and no, it does not include auto. And the auto was -- we did auto last year.

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Jeffrey P. Meuler, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [31]

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Right. I guess what I'm wondering is did you assume kind of the mid-single-digit volume growth, plus you have the benefit from auto that you haven't yet anniversary-ed, so you'll get outsized growth there in Q1?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [32]

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Yes.

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Jeffrey P. Meuler, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [33]

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Or are you assuming high single digit because of something related to the mortgage end-market assumption just given that mortgage has been stronger recently?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [34]

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Yes, I can take that. We have seen some strength in mortgage origination scores consistent with what you can see in external data from the MBA and otherwise. But that's not directly reflected in the guidance in the Scores segment. It really is, as you described, low single-digit volume increases across-the-board, cost-of-living-type price increases across the portfolio, and really, nothing specifically in there for any kind of lingering effects of past price increases.

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Jeffrey P. Meuler, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [35]

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Okay. And then I get that it's not baked into the guidance, but it sounds like you're planning some additional special pricing adjustments. Just order of magnitude, do they have the potential this next round to have a similar impact on your revenue as the auto pricing or the mortgage pricing? Just any rough sizing?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [36]

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Yes. Well, as you know, we won't commit to rough sizing, but they do have the potential. I would say the potential is certainly there.

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Operator [37]

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And all that does conclude the Q&A session of the call for today. Gentlemen, I'll turn it back to yourselves. Please continue.

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Steven P. Weber, Fair Isaac Corporation - VP of IR & Treasurer [38]

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Thank you. Thank you to everyone for joining, and that concludes today's call. We look forward to talking with you again. Thank you.

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Operator [39]

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And that does conclude the call for today. We thank you very much for your participation and ask that you please disconnect.