Credit scoring and analytics company FICO (NYSE: FICO) fell short of the market’s revenue expectations in Q2 CY2026, but sales rose 25.7% year on year to $674.2 million. The company’s full-year revenue guidance of $2.53 billion at the midpoint came in 0.9% below analysts’ estimates. Its non-GAAP profit of $12.18 per share was 3.4% above analysts’ consensus estimates.

Is now the time to buy Fair Isaac Corporation? Find out by accessing our full research report, it’s free.

Company Overview

Creator of the three-digit number that can determine whether you get a mortgage or credit card, Fair Isaac Corporation (NYSE: FICO) develops analytics software and the widely used FICO Score, which is the standard measure of consumer credit risk in the United States.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $2.39 billion in revenue over the past 12 months, Fair Isaac Corporation is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, Fair Isaac Corporation’s sales grew at an excellent 12% compounded annual growth rate over the last five years. This is a great starting point for our analysis because it shows Fair Isaac Corporation’s demand was higher than many business services companies.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Fair Isaac Corporation’s annualized revenue growth of 20.3% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Fair Isaac Corporation generated an excellent 25.7% year-on-year revenue growth rate, but its $674.2 million of revenue fell short of Wall Street’s high expectations.

Looking ahead, sell-side analysts expect revenue to grow 19.2% over the next 12 months, similar to its two-year rate. Still, this projection is admirable and implies the market is forecasting success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.

Fair Isaac Corporation has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average adjusted operating margin of 53.3%.

Analyzing the trend in its profitability, Fair Isaac Corporation’s adjusted operating margin rose by 11.8 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, Fair Isaac Corporation generated an adjusted operating margin profit margin of 61.5%, up 4.8 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Fair Isaac Corporation’s EPS grew at 26.2% compounded annual growth rate over the last five years, higher than its 12% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of Fair Isaac Corporation’s earnings can give us a better understanding of its performance. As we mentioned earlier, Fair Isaac Corporation’s adjusted operating margin expanded by 11.8 percentage points over the last five years. On top of that, its share count shrank by 22.2%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Fair Isaac Corporation, its two-year annual EPS growth of 33.8% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q2, Fair Isaac Corporation reported adjusted EPS of $12.18, up from $8.57 in the same quarter last year. This print beat analysts’ estimates by 3.4%. Over the next 12 months, Wall Street expects Fair Isaac Corporation’s full-year EPS to grow 30.5% from $39.75 to $51.86.

Key Takeaways from Fair Isaac Corporation’s Q2 Results

It was good to see Fair Isaac Corporation beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 9.4% to $1,245 immediately following the results.

The latest quarter from Fair Isaac Corporation’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).