FICO's shares fell 14.7% after the Q3 earnings report as investors reacted negatively to the Software segment's poor performance, marked by a 25% decline in non-platform revenue, and cautious indications of deceleration despite growth in Scores and platform revenue.
- Total Q3 revenue grew 26% year-over-year to $674 million, driven primarily by a 41% increase in Scores segment revenue to $459 million.
- Software segment revenue showed a mixed picture: platform revenue surged 66%, but was offset by a 25% decline in non-platform revenue, suggesting challenges in legacy or non-core offerings.
- GAAP net income increased 30% to $237 million, while non-GAAP net income rose 31% to $277 million; GAAP EPS grew 41% to $10.45, non-GAAP EPS climbed 42% to $12.18.
- Free cash flow for the quarter reached $370 million with aggressive capital return activities, including a record $1.96 billion in share repurchases.
- Despite positive developments in credit scoring products and adoption programs, the cautious tone around software growth and sector-specific headwinds likely weighed on investor sentiment.
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