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Edited Transcript of FICO earnings conference call or presentation 31-Jul-19 9:00pm GMT

Q3 2019 Fair Isaac Corp Earnings Call

MINNEAPOLIS Aug 29, 2019 (Thomson StreetEvents) -- Edited Transcript of Fair Isaac Corp earnings conference call or presentation Wednesday, July 31, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Michael Joseph Pung

Fair Isaac Corporation

* 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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* Adam Klauber

William Blair & Company L.L.C., Research Division - Partner & Co-Group Head of Financial Services and Technology

* Brett Richard Huff

Stephens Inc., Research Division - MD

* 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 call is being recorded today, Wednesday, July 31, 2019.

I would now like to turn the conference over to Steve Weber, VP, Investor Relations and Treasurer. Please go ahead.

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

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Thank you. Good afternoon, and thank you for joining FICO's Third Quarter Earnings Call.

I'm Steve Weber, and I'm joined today by our CEO, Will Lansing; and our CFO, Mike Pung. 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 at fico.com or on the SEC's website at sec.gov. A replay of this webcast will be available through July 31, 2020.

And with that, 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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Thanks, Steve. Thank you, everyone, for joining us on our third quarter earnings call.

I'm pleased to report we delivered a record quarter with some remarkable results. We recorded our highest revenue quarter ever at $314 million, up 23% over last year. It was a good quarter for license sales, but notably it was also very good quarter for recurring revenue. All 3 segments drove double-digit recurring revenue growth, and total company recurring revenue was up 18% over last year. We continue to see the benefits of our business model shift to the cloud. We had another good bookings quarter at $109 million, with many being recurring revenue deals. Year-to-date, our recurring revenue bookings are up 18%.

We delivered $64 million of GAAP net income and GAAP earnings of $2.12 per share, up 116% and 122%, respectively. We delivered $76 million of non-GAAP net income and non-GAAP EPS of $2.50.

Perhaps most impressive this quarter was the strength of results across our entire portfolio. In Applications, revenues were up 19% over the prior year. Much of this is due to some term license renewals. We also drove double-digit growth in transactional volumes. This, of course, is key to our cloud strategy. As our customers use our products across larger portions of their enterprise, we can drive sustainable recurring revenue growth. We had a particularly strong quarter in our banking fraud solutions business where we closed some large renewals and also signed some sizable new deals. We also had a good quarter in our Customer Communication Solutions where we had nice transactional volume growth.

In our Decision Management Software segment, we're seeing significant growth in both bookings and revenue. DMS revenues were a record $33 million led by sales of our decisioning platform and Blaze. We also had $37 of new DMS bookings, a record quarter and up 35% from the previous year. We signed a number of Decision Management Platform deals, steadily gaining more traction. Throughout our software business, we're selling more cloud deals. They accounted for more than 40% of our total bookings this quarter.

In the Scores business, we had another record quarter at $115 million of revenue with both volumes and unit pricing up over last year. B2C revenues were up 8% this quarter, and our B2B revenues were up 36% over the same period last year. The B2B growth was driven by increased originations and account management volumes as well as the continuing impact of the pricing initiatives we discussed last quarter. We see strength throughout the various verticals and life cycles in the Scores segment and expect it to continue to perform well.

We're also making progress on data decision cloud partnership with Equifax that we announced back in March. Our teams are working together to bring 3 products to market: First, a connected platform integrating our Decision Management solution with Equifax' extensive data; Second, our suite of AML and KYC technology. We'll use Equifax' differentiated data to offer a full-service, best-in-class compliance offering; and third, Prescreen Central integrates FICO's Marketing Solutions products with Equifax' consumer data to deliver a direct marketing solution.

We'll keep you posted on the progress we're making with this exciting partnership.

Finally, we continue to deploy significant resources through our share repurchase program. In the third quarter, we spent $59 million and another $20 million in July for a total so far this fiscal year of $199 million. We exhausted the 2018 Board authorization, and today, we announced a new $250 million share repurchase authorization.

I'll share some summary thoughts later, but now, I'd like to turn the call over to Mike to take you through our financial results.

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Michael Joseph Pung, Fair Isaac Corporation [4]

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Thanks, Will, and good afternoon, everyone.

Today, I'll emphasize 3 points in my prepared comments. First, we delivered $314 million of revenue, an increase of $59 million or 23% year-over-year. Recurring revenue was $226 million, up 18% from last year. Second, we delivered $64 million of GAAP net income, which is up 116% year-over-year. And finally, we had $61 million of free cash flow this quarter, and we spent $59 million of it on share repurchases.

I'll begin by breaking revenue down into our 3 segments, starting with Applications, where revenues were $166 million or up 19% versus the same period last year. We had a particularly strong quarter in Fraud, which was up 80%, in part due to some term license renewals. We also had a good quarter in our CCS business, which was up 13% compared to last year. And we also saw strong volumes throughout the portfolio, with recurring revenues up 10%.

We had another good quarter in our Decision Management Software segment, where revenues were at $33 million, up 31% versus the prior year, with strong platform and Blaze sales. Recurring revenue in DMS were up 14% from the previous year. Bookings were a record $37 million or up 35% from last year. And finally, of course, in our Scores segment, revenues were a record $115 million, up 27% from the same period last year and 10% over last quarter.

On the B2B side, we're up 36% versus the same period a year ago, and B2C revenues were up 8% from the same quarter last year.

Looking at revenue by region. This quarter's 72% of total revenues were derived from the Americas. The EMEA region generated 21%, and the remaining 7% was Asia Pacific. Recurring revenue derived from transactional and maintenance sources for the quarter represented 72% of total revenue. Consulting and implementation revenues were 14% of total revenue, and license revenues were 14% of total revenue.

Cloud revenues were $69 million this quarter, up 19% from last year. Bookings this quarter were $109 million, down about 9% from the prior year. We generated $16 million of current period revenues on those bookings for a yield of 15%, and the weighted average term of our bookings was 38 months this quarter.

We had 19 deals over $1 million, 4 of which were over $300 million. Cloud bookings were $46 million this quarter and $119 million year-to-date, which is up 24% from last year. While we are pleased with the sixth straight quarter of above $100 million in bookings, year-to-date we are still pacing below our expectations, which is important as bookings generate future revenue.

Operating expenses totaled $229 million this quarter compared to $230 million in the second quarter. We expect to maintain a similar run rate in the fourth quarter while actively investing our resources in our highest strategic priorities.

Our non-GAAP operating margin, as shown in our Reg G schedule, was 34% for the quarter and 29% year-to-date. We expect the full year operating margin to be around that 29%.

GAAP net income this quarter was $64 million or $2.12 a share, and non-GAAP net income was $76 million or $2.50 a share. And the effective tax rate was about 18% for the quarter. We expect our annual tax rate to be about 14%.

The free cash flow for the quarter was $61 million versus $72 million in the prior year and for the trailing 12 months, our free cash flow was around $200 million.

Now turning to the balance sheet. We had $79 million of cash at the end of the quarter. Our total debt is $828 million with a weighted average interest rate of about 4.7%. The ratio of our total debt -- net debt to adjusted EBITDA this quarter is down to 2.3x, which is well below our covenant level of 3x.

During the quarter, we returned $59 million in excess cash to our investors, repurchasing 205,000 shares at an average price of about $289 a share. We also purchased an additional $20 million in July, which exhausted the Board authorization from last year. We have repurchased more than 840,000 shares this fiscal year at an average price of $237.

We announced earlier today the Board has approved a new $250 million authorization and continue to view share repurchases as an attractive use of our cash. And we also continue to actively evaluate opportunities, to acquire relevant technologies and products that advance our strategy or strengthen our portfolio and competitive position.

Now with one quarter remaining in our fiscal year, we're reconfirming our guidance that we updated last quarter with revenue of $1.14 billion, GAAP net income of $173 million and GAAP EPS of $5.75. Of course, non-GAAP net income is $214 million, and non-GAAP EPS is $7.12.

Finally, as you know, this is my 60th and last official earnings call. For those of you on the call that cover FICO, I've appreciated the time we spent discussing our company and getting to know each of you on a personal level.

I'd also like to give my heartfelt thanks to all the members of our finance team. Your hard work, dedication and commitment to operate with the highest standards has given me confidence in reporting our results over the years.

And finally, I'd like to thank our investors for the trust and faith you have placed in me as a steward of these amazing assets.

With that, I'll turn the call back over to Will for some final comments.

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

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Thanks, Mike.

Next quarter, we'll talk about our expectations for 2020, but for now, I'd like to review what we've been able to accomplish in 2019.

In Scores, we continue to find new ways to extend the analytics in both the B2B and B2C markets, and we're working hard to make sure pricing is appropriate given the massive value that the FICO Score adds to the financial markets. On the software side, we're steadily growing our cloud business, and our products are well positioned to serve customers looking to use analytics to make better decisions.

As we've often said, these are exciting times at FICO. We have a very strong team helping our customers solve their most difficult problems, and we continue to develop end-market world-class technology to put advanced analytics into production to make better decisions.

Finally, I would like to thank Mike, who's retiring after nearly 15 years with FICO, the last 9 as Chief Financial Officer.

During his career at FICO, revenues grew from around $600 million in fiscal 2010 to this year's guided $1.1 billion. Mike oversaw an ambitious long-term stock buyback program that increased value for shareholders while enabling FICO to advance its innovations in analytics and solution development.

Mike has been a great CFO. He distinguished himself with the Board and with our investors and guided us through the last recession, driving critical resource allocation decisions that gave FICO the runway to invest again in new products and services. We thank him and wish him well.

I'd also like to welcome Mike McLaughlin to FICO as our new CFO. Mike will be joining us from Morgan Stanley, where he was the Managing Director and Head of Technology Corporate Finance. He brings us a wealth of leadership experience in both financial services and technology.

He'll be starting next week, and looks forward to meeting with many of you in the coming months.

I'll now turn the call back to Steve for 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 ready now to take 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 from Barclays.

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

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And firstly, congratulations, and a big thank you to Mike as well. If I could just start with the bookings comments that you made about it being below expectations, and I was just wondering if you could help give a little bit more color on maybe how much below and why you think it is below the expectation?

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

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I guess I would say I wouldn't put too much stock into it. That number does move around. You know how it is when deals push at the end of the quarter. We've pretty consistently shared with you that we don't do our natural ask to close deals at the end of the quarter. And so while we have an internal budget that has numbers for each quarter, I wouldn't read too much into it.

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Manav Shiv Patnaik, Barclays Bank PLC, Research Division - Director & Lead Research Analyst [4]

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Got it. And then maybe along the same lines, like you obviously had a pretty good quarter, and I guess I just wanted to get some sense on maybe why there wasn't a guidance raise involved in there with only a quarter to go. Presumably, there's enough visibility there?

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Michael Joseph Pung, Fair Isaac Corporation [5]

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That cuts both ways. Yes, there's enough visibility, but at the same time, we're 1 quarter away from closing out the year. I'm not sure what the point would be in raising guidance at this point.

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Manav Shiv Patnaik, Barclays Bank PLC, Research Division - Director & Lead Research Analyst [6]

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Okay. And then maybe just one last one for me. We obviously heard Equifax talk about these products that you guys are putting out together. Just -- can you just help us with a little bit on is it a revenue share model or who's going to do most of the heavy-lifting on the sales front? Any other color there, please.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [7]

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Sure. I mean it is a rev share model. We're in it together. We're trying to market the solution as a joint solution and make it easier for the customer to get the end-to-end solution that we have on offer. It's a -- the sales effort is on both sides, and it depends on who has which relationships and which product that we're -- product and service we're working with. So I think that varies.

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Operator [8]

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Our 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 [9]

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So the Scores revenue looked particularly strong this quarter, accelerating from last quarter. Is there any reason why that Scores volume should decline next quarter? It seems like it's pretty much a stair-step in terms of the price increases coming on.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [10]

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Well, Bill, so with this quarter we saw, of course, some of the additional feathering in of our auto scores that we described in the last call. We also saw a couple of residual customers start to roll in on the mortgage increase we did just over 1 year ago. And so beyond that, we had a small audit settlement that's a one-timer. That was in these numbers. From time to time, we have global FICO Score deals that are license-oriented, and we had a little bit of that this quarter. Those come and go on a variety of basis. And we saw volume increases in the mid-single-digit range and in a couple of cases on the origination side a little bit better than that.

So with all that as a background, the revenue model could grow, assuming volumes continue to grow strongly over where it was last year in the fourth quarter, and that's probably the biggest variable that's uncertain at this point is how much the volumes will look like in our fourth quarter and whether we have any other kind of one-timers that come along.

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

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Okay. So now CCS, there've been some client departures last quarter, but this quarter you guys signaled that one out as being particularly strong performance. I just wanted to ask about how that business was doing and what had happened with those clients who had left and whether you've been able to get new clients to replace them. Just a little color on that.

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

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Yes. I'd say that we have business coming and business going. Some of the business goes when big banks decide that they're going to try to achieve the same thing that our CCS offering does on their own by putting together with a fair bit of systems integration on their side, the components of it. And while we have very large banks who are happy with CCS, there's also the ones that choose to do it alone. We are adding business. We're adding business in Asia, we're adding business around the world, and so we're still very happy with the business.

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William Arthur Warmington, Wells Fargo Securities, LLC, Research Division - MD & Senior Equity Analyst [13]

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Yes. So I noticed that the average term of the bookings this quarter went up to 38 months. And maybe you could talk a little bit about that occurrence. Is that a one-off event in terms of some of the deals that you signed? Or maybe you can give us a little quarter color on what's behind that increase.

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Michael Joseph Pung, Fair Isaac Corporation [14]

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It's been trending upward for years, and I think it's a reflection of the fact that the solutions that we're putting in place are more complex, more comprehensive, and once installed, the customer has a desire to lock down a longer term. And so we're seeing some of that.

We don't have tremendous financial incentives for our salespeople to go push long terms. We really want to do just what the customer wants. And so I would say that the term length is really dictated by the customer, and I think it's largely because they put in our solutions and they're not quick to take them up, and they feel more comfortable signing up a bigger deal.

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William Arthur Warmington, Wells Fargo Securities, LLC, Research Division - MD & Senior Equity Analyst [15]

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And how's the rollout of Falcon X doing?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [16]

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It's rolling. We're excited about the prospects we're getting out into the marketplace. The early reception to what's coming has been extremely positive, and so we think we have the right solution coming at the right time. We have a lot of people working on it right now.

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William Arthur Warmington, Wells Fargo Securities, LLC, Research Division - MD & Senior Equity Analyst [17]

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So -- and then last question for me is on the UltraFICO Score. Experian has been running ads on their Boost product. I wanted to know if that is actually generating revenue for you yet, or is it still pre-revenue?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [18]

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With Boost, we actually participate in that. With UltraFICO not generating revenue, yes, we're in test mode, still.

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

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Got it. Before I go, I just wanted to say congratulations to Mike on a great run, and happy trails.

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Michael Joseph Pung, Fair Isaac Corporation [20]

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Thanks, Bill. We'll come out and see you sometime. Thank you.

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Operator [21]

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(Operator Instructions) Our next question comes in the line of Brett Huff with Stephens.

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

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Congrats on a nice quarter, and thanks for the detail as always. And Mike, sorry to see you go, but I hope things go well in the next chapter.

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Michael Joseph Pung, Fair Isaac Corporation [23]

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Appreciate that, Brett.

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

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Can you guys -- you guys talked a little bit about some of the SaaS products that you're developing, and I know that we're midstream on those. Can you give us -- I don't know if you mentioned TRIAD or the next-gen product that TRIAD is. I think it's customer director, if I'm remembering right. Any updates on how that's coming along?

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

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Yes. It's actually called Strategy Director, which is the successor to TRIAD. And it's -- Customer Management is what it does. It's going really well, so there's absolutely uptake the market for it.

And for us, Strategy Director is a lot of the TRIAD functionality but ported over to our Decision Management Platform business, and that's becoming increasingly important for us. I mean we're really focused on how do we solve our customers' needs with our platform solution. And although we still sell some things that are not on the platform, increasingly the solutions are on the platform. And so Originations is on the platform, strategy Director is now on the platform, Falcon X will be in the platform. And so this idea of getting to a unified kind of single code-based platform with tremendous ease of use and ability to manipulate data across different -- for different purposes, it's coming together very nicely.

But with respect to Strategy Director, in particular, doing very well. We're selling it, and we're happy with it.

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

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That's a nice segue to my next question. I know a lot of folks look at your business and think there's sort of margin in there to be realized over time. I know you're investing kind of in demand that you really see coming over the hill. Just kind of -- you're mentioning sort of centralizing on a more common platform, raises that question and maybe highlights that possibility for showing some more margin over time. Is that how we should think about it? Is that sort of a gross margin focus once you get everything centralized? And how do we think about the tenor of that?

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

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Yes, I would say that's a very astute question because that really is how you should think about it. Today, we have a really broad portfolio of software solutions with a lot of customization. And it's expensive to -- not expensive, but it takes a lot of PS resources to install and to customize to our customers' satisfaction. And with the platform, that's going to be simplified. With the platform, there will be a lot -- much higher level of configuration. There will be returns to scale for us, and there will be benefits for the customer from a total cost of ownership.

So as more and more of our new business winds up on the platform, yes, I think it's reasonable to infer that margins will go up. That's not guidance for next year, but that's just a reality that -- it's in the economics of getting into a platform business.

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Brett Richard Huff, Stephens Inc., Research Division - MD [28]

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That's helpful. And then can you talk -- just remind us your view on total Scores through the cycle? If I recall I think it went from maybe $8 billion, and we're now at $11 billion, something like that. Is your sense -- first, remind us if that's right. And then the second is we get a lot of questions, is the FICO Score less cyclical now than it was before? I think the answer is yes, but kind of give us your view on that and how -- I won't say revenues will go for Scoring, but how the durability of the score usage might be this time around if we have a recession?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [29]

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Sure. So the low point was right after the 2008 reset, and we were about $9 billion Scores then. The high point was $13.5 billion, right before that. Today, we're -- we have not yet hit that $13.5 billion.

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Michael Joseph Pung, Fair Isaac Corporation [30]

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$14.5 billion.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [31]

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I'm sorry. It's $14.5 billion today. So we've just surpassed that level. But the more important part of your question is right, which is how sensitive are we to economic cycles, and what happens in the future.

And I would say that we have a lot more scores than we used to have. I mean we have more breadth there. We're starting to sell scores internationally, and so there's a little bit of diversification there. And we have more flexibility in what we charge. So I think that the -- well, obviously, we're not immune. We would suffer with volumes declining. I don't think it would be anything like what it once was.

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Brett Richard Huff, Stephens Inc., Research Division - MD [32]

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Okay. And then last question for me, when we think about DMS and I think about big data and analytics, I think the Equifax partnership looks great, but it seems to me that DMS and big data are going to be -- I'm not sure -- is there a killer app for big data out there? I know you kind of had killer apps in Falcon and TRIAD. I know those are all kind of based on the same thing. But are you seeing emerging use cases that we're not seeing yet that you're getting more excited about that might power more consistent DMS growth?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [33]

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We definitely expect more consistent DMS growth and a lot more of it. I'm not sure that I would call it a single use case, except at a very high level. I think that the use case is digital transformation. I think what we have is a situation where financial services has run 7%, 8% of GDP for quite a long time. And over the coming 10 years, it will probably get cut in half as those products and services are provided through automation, through using lower-cost means. And I think that our Decision Management Platform is aimed at providing data-driven decisioning to power those kinds of decisions.

So I would say that as things continue on their journey to -- their digital transformation journey, as they continue to try to look at disparate data to have a more comprehensive view of a customer, the 360-degree view of the customer, as they seek to understand the customer journey better, all those things speak to the value of our Decision Management Platform as a solution.

I don't think it's a single use case. I mean I think historically, things have had a need for a single use, for Originations for some area, for collections and recovery for some area, for Fraud for some area. I think increasingly we'll see the lines blur there, and banks will be seeking more comprehensive solutions, the likes of which we have in Decision Management Suite.

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Operator [34]

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Next question comes from the line of Adam Klauber with William Blair.

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Adam Klauber, William Blair & Company L.L.C., Research Division - Partner & Co-Group Head of Financial Services and Technology [35]

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As far as price increases, you've obviously got mortgage, auto. How's the dialogue now in credit cards, and if you could give us an idea, do you think that's likely or unlikely?

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

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I think that all the scores beyond mortgage and auto is a bigger and more disparate group of scores, and so there's not a simple answer to that. I think that we're -- we always evaluate where there's opportunities. And it's not as clean as saying, "Well, here's the next thing that we're going to go do." But I think you can expect that we'll systematically look for opportunities.

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Adam Klauber, William Blair & Company L.L.C., Research Division - Partner & Co-Group Head of Financial Services and Technology [37]

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Okay, okay. And then on the Scores, what do you think is going to drive B2C revenues going forward -- revenue growth going forward? Still growing at a decent pace but somewhat slower than it was in the last year or 2.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [38]

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I would say more of the same. It will be sometime before UltraFICO and things like that really make an impact. The volumes were more of a lagging indicator than a leading indicator. And so the volumes -- you have greater visibility into what the volumes are likely to be than I would say we do because we follow interest rates. So I think your guess is as good as ours on where it goes. We feel pretty good about things, but you should consult your own crystal ball.

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Adam Klauber, William Blair & Company L.L.C., Research Division - Partner & Co-Group Head of Financial Services and Technology [39]

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Sure. Okay. And then as far as Falcon, I know you've had some sales internationally, I think South America. How's the pipeline for future Falcon sales?

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [40]

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Strong. Strong, and South America has been really strong.

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Michael Joseph Pung, Fair Isaac Corporation [41]

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Adam, some of our biggest deals this quarter were Falcon and Falcon in the cloud. Two of our top 10, as an example, were deals that we signed on in Latin America in the last 3 months that were tied to Falcon. So despite the fact that we have a pretty big install base, there are pockets of opportunity, especially with the cloud, that are coming on.

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Operator [42]

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And gentlemen, there are no further questions at this time. I'll turn the call back to yourselves. Please continue with your presentation or closing remarks.

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William J. Lansing, Fair Isaac Corporation - President, CEO & Director [43]

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Thank you very much.

That concludes today's call. Thank you all for joining.

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Operator [44]

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